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Hotel Chocolat steps up transformation into international multichannel business

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Hotel Chocolat this week said it was stepping up the pace of change as it rebalances its business towards becoming an international multichannel supplier rather than just a UK retailer.

The retailer reported rising sales over both the last quarter and the last half-year as it opened more shops in the UK, Japan and US and built closer relationships with customers through its loyalty scheme. Now it plans to speed up the pace of supply chain transformation in order to build itself into, effectively, an international brand. The retailer – which has its own cocoa plantation on St Lucia – aims to make its supply chain more efficient over the coming year.

Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, said: “This was another strong performance from Hotel Chocolat. In our domestic UK market, we grew our VIP-Me member base to over 1.1m active members, as well as driving strong organic growth from our existing physical locations. We will continue to bring Hotel Chocolat to more locations in the UK where the deals are appropriate.

“The USA and our joint venture in Japan are both delivering an encouraging performance, growing to four and five locations respectively by the end of period. While much of 2019 was about getting started in these large new markets, 2020 will see us accelerate our supply-chain transformation. This focus will rebalance us from being a UK-based company operating from owned channels, to one more suitable for multi-channel multi-territory international supply.”

The update came as Hotel Chocolat, listed Top100 in IRUK Top500 research, said in a trading update that group revenue came in 11% ahead in the 13 weeks to December 29, and 14% ahead in the half-year to the same date.

During the half-year the retailer opened nine new shops in the UK, where it now has 125 sites, two in the US, where it now has four, and three in Japan, rising to five. The new openings contributed three percentage points (3pp) to half-year group revenue growth. However, the retailer said that while trading over the last quarter and since Christmas had continued to meet its expectations, the cost of those sales had been “modestly higher due to inefficiencies in the supply chain which are being addressed in 2020”.

It said that its Velvetiser hot chocolate maker had gained popularity over the period, with customers now able to subscribe to regular refills. Customer demand for new flavours, it said, had exceeded initial forecasts and it was now taking pre-orders.

“We also launched Nutmilk, our outrageously creamy new ’milk’ chocolate which just happens to be 100% vegan,” said Thirwell. “It’s been five years in the making and is an immediate hit.”

Image courtesy of Hotel Chocolat

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