Axe will fall on shops as Thorntons suffers from cold spell

It also announced plans to close stores following a change in consumer spending habits as more shoppers buy online or via other retailers.

New chief executive Jonathan Hart said the 100-year-old group will take advantage of more than 200 lease expiries in the coming years to reshape the business.

“I’m not indicating at all that we plan to close that number of stores,” he said. “But I think it’s clear that the size of the portfolio is going to be reduced going forward.”

Several mainstays of the shopping streets are struggling as competition from online retailers and supermarkets is exacerbated by tough conditions for consumers as prices and taxes rise while public spending is cut.

Music and books group HMV and sportswear chain JJB Sports are also closing shops, as they seek to avoid the fate of retailers such as Woolworths and Zavvi, who went bust during the recession.

Thorntons, which has 371 owned stores and 229 franchise outlets, said profits before tax and one-off items fell 8.5 per cent, to £8.3m, in the 28 weeks to January 8.

This was due, in part, to severe winter weather around Christmas and to the rising cost of raw materials such as cocoa.

It also joined retailers like electricals group Kesa and carpet seller Carpetright in reporting weaker-than-expected sales since Christmas – a trend supported by a survey out yesterday showing a steep drop in consumer confidence in January.

As a result, Thorntons said it expected underlying profits for the year to June 30 would be around the previous year’s level of £6.1m, compared with analysts’ average forecast of £6.8m.

Singer analyst Matthew McEachran said: “Clarity about the own store strategy will be key to boosting sentiment going forward.”

Mr Hart, who joined in January from coffee chain Caffe Nero, said he would announce a strategic update in the second half of the group’s financial year, without being more specific.

Thorntons said own-store sales, about 55 per cent of total revenues, fell 5.2 per cent at outlets open at least a year in the first half of its financial year.

It declined to give a figure for recent weeks, when it said trading had been weaker than anticipated. In contrast, sales to other retailers jumped 31 per cent to account for about a third of total revenues, while online sales climbed 8.5 per cent.

The company said that December’s Arctic weather wiped £3.5m from its sales and raised the cost of manufacturing and delivering its goods by £500,000.

The dividend was kept at 1.95p.

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