Profits are up at coffee and tea specialist Whittard of Chelsea after it streamlined its store estate and improved its range and multichannel offer.

The retailer has recorded a £1.2m rise in EBITDA before exceptional items to £1.4m from December 25, 2011 to December 29, 2012.

Total sales edged up to £31.8m from £31.5m the previous year, helped by “a substantially improved contribution of retail portfolio”. Retail sales account for around 80% of Whittard’s revenue.

Whittard has hired former Nokia retail development director and TM Lewin retail director Mark Jones to spearhead overseas growth. The retailer has wholesale and franchise retail operations in 35 countries and has enhanced its international offer by launching local language websites in Japan, Germany, France and Italy in addition to its existing US site.

The retailer closed nine “marginal profit making” stores in the year to bring its UK portfolio to 63 stores.

However, the retailer is investing in improving its store offer. The retailer will begin a trial of a new store format within its existing Buchanan Street, Glasgow store later this summer.

The redesigned store features new display tables, a “teapot wall” and a larger range of speciality loose teas weighed for the customer. It will also feature an extended range of fine coffees ground to customer preference.

Whittard said like-for-like gross margin grew across all channels after it increased the quality of its premium ranges.

UK online sales grew 31% in the year and it plans to add a tea and coffee club to its UK website this year.

Whittard managing director Sara Halton said: “We are pleased to announce a profitable 2012. We have successfully grown the business and improved our trading performance both in the UK and abroad despite tough economic trading conditions.

“We continue to see improvement in our margins as we reap the benefits of enhancing product range, quality and appeal. We are encouraged by our progress and believe the hard work from all our employees will be a building block for successful years to come.”

The retailer, which last year celebrated its 125th anniversary, said it had saved costs and improved customer service by moving its distribution centre to an outsourced third-party logistics supplier.

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