Hotel Chocolat signs deal with Tokyo-based Eat Creator Corporation
The chain unveiled a deal with Tokyo-based Eat Creator Corporation which will include 21 Hotel Chocolat-branded shops across Japan.
Hotel Chocolat, which has seven stores in Yorkshire, will hold a 20 per cent stake in the joint venture and will receive brand royalty revenues.
It said Eat Creator will provide “growth capital, new supply-side know-how and proven expertise in food brand development for the Japanese consumer”.
Hotel Chocolat’s previous partnership in Japan, launched in 2018, hit the buffers last year, leading the group to write off around £22m.
This pushed it to a pre-tax loss of £9.4m in the year to late June, down from a £3.7m profit a year earlier.
It was forced to restructure the joint venture after its then partner demanded a hefty sum of investment to keep going.
Hotel Chocolat said the new agreement with Eat Creator would see it apply the “key business learnings from the first four years of trading in Japan”.
Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, said: “Our new partner is well-equipped to optimise the brand’s potential for Japan, bringing proven expertise, new capital and a natural alignment on brand values.
“We are looking forward to combining the ingredients of Eat Creator with the ingredients of Hotel Chocolat into a powerful recipe for our next chapter in Japan.”
Eat Creator’s chief executive Satoshi Nagasuna said he had watched the “positive impact that the Hotel Chocolat brand has made in our market over the last four challenging years”.
He added: “When the opportunity presented itself to become directly involved with the business, we realised that our skills would be a good match with what was needed to take Hotel Chocolat Japan to the next level. We are excited to get started.”
Its previous attempt at cracking the Japanese market was hampered by Covid in 2020 and 2021. The Japanese government also reinstated movement restriction guidance in 2022.
While the company suffered three years of badly hit sales and profits in the country, it said it has a database of more than 200,000 registered Japanese consumers.
Eat Creator already has food ventures in Tokyo including Neki, Social Kitchen, Unis, BANK kabutocho, Songbook, Teal and Ease.
The deal comes after Hotel Chocolat reined in its global investment plans in 2022, shutting its direct to consumer business in the US in the year the previous Japanese joint venture hit troubles.
But trading has been more resilient in the UK, where sales rose 23 per cent in its previous financial year. Last summer, Mr Thirlwell told The Yorkshire Post: “The Hotel Chocolat brand is achieving very strong growth in the UK, and we are pleased to have beaten sales expectations and expect to meet underlying profit expectations for FY22 (full year 2022). Our store in Harrogate is storming after upsizing.”