Hotel Chocolat strikes Hut Group deal in US as coronavirus hammers profits

The chocolatier swung into the red during the 52 weeks to June 28, announcing a statutory pre-tax loss of £6.5m, compared with a £10.9m profit the previous year.

Stripping out the impact of exceptional costs, Hotel Chocolat’s pre-tax profit tumbled 83% to £2.4m, while underlying EBITDA fell 54% to £9.4m.

The retailer’s revenues rose 3% during the year to £136.3m, but dropped 14% during the second half of the year as a result of the coronavirus pandemic and the 12-week closure of its physical stores – impacting the crucial Easter period.

Hotel Chocolat said despite the disruption it was “well-positioned” to navigate the crisis and hailed progress on its strategic initiatives.

That includes a new deal with THG Ingenuity, The Hut Group’s global technology platform, to help it grow its reach in the US.

Hotel Chocolat has penned a five-year deal with THG, which will allow it to “build a more personalised relationship with its US-based customers” and help it “generate a long-term, sustainable presence online”.

THG will provide Hotel Chocolat with its chilled storage distribution, offering next-day delivery to customers on the east and west coasts of the US. 

THG founder and chief executive Matt Moulding said: “We are proud to announce this partnership with Hotel Chocolat, bringing our DTC and ecommerce capabilities to this renowned UK retailer and helping it to reach an international audience.

“It comes at a particularly crucial time for the British retail sector, when brands must flex in response to the constantly evolving environment.”

Hotel Chocolat is also expanding into Asia and said its eight stores in Japan were “progressing well”. 

The business said trading during the first 12 weeks of its new financial year were “in line with management expectations”, with online sales up 150% compared with the same period a year ago.

Hotel Chocolat founder and boss Angus Thirlwell said: “The events of 2020 have challenged all of us, but also brought out the best in us, ethically, competitively and professionally, making us better equipped to face the future.

“The challenges of Covid-19 have pushed us to accelerate many of our existing plans and strategic initiatives, helping to strengthen our financial position, improve our multichannel capability, deepen customer engagement and loyalty, and accelerate the rate of product innovation, while continuing to make good progress in our two new and sizeable markets of the USA and Japan.”

Thirlwell cautioned that “uncertainty will continue” in the coming year, but insisted its pipeline of growth opportunities “has never been stronger”. 

He added: “I am confident that the strategic progress we have achieved over the past year will build a stronger business in the medium-term with greater growth, profitability and brand appeal.”