Hotel Chocolat’s Japanese joint venture has entered into “civil rehabilitation”.
The chocolate specialist’s Japan arm, Hotel Chocolat KK, has secured court approval to undergo restructuring.
The venture is seeking to restructure, pursuant to acquiring new sources of financing.
Hotel Chocolat owns a 20% stake in the venture and has loaned £23m to Hotel Chocolat KK between 2019 and 2022 for working capital purposes.
The retailer has also entered into guarantee arrangements of up to £5.8m for loans made to Hotel Chocolat KK by Japanese leasing companies.
Hotel Chocolat issued a profit warning earlier this month and said it would be looking to reduce its investment in the US and Japan.
Co-founder and chief executive Angus Thirlwell said: “A year of exceptional sales growth following two years of reactionary tactics to the pandemic has left clear opportunities for us to proactively streamline overheads and improve gross margins.
“While we expect a temporary lower sales growth rate and profit margin for FY23 as we carry through our adjustments, the result will be a business delivering greater results, with less risk and an even stronger balance sheet with a higher profit percentage growth in FY24 and FY25.”
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