Hotel Chocolat, co-founded by Angus Thirlwell, is floating on AIM

Hotel Chocolat, co-founded by Angus Thirlwell, has floated on AIM.

When Angus Thirlwell and Peter Harris opened the first Hotel Chocolat in Watford back in 2004, world domination seemed a million miles away.

The ambitious duo, who had renamed the retailer from the much less luxurious sounding Choc Express the previous year, had grand designs to build the globe’s leading destination chocolate brand.

Fast-forward to 2016 and, with 81 stores and two flagship restaurants in the UK, three shops in Copenhagen, a flourishing website, a hotel in St Lucia and a £167m stock market flotation, Thirlwell and Harris now have the potential to shift their growth strategy into another gear.

Investors have been convinced that Hotel Chocolat is far from just flavour of the month.

Group sales jumped 10% to £81.1m last year, despite a tumultuous time for the wider food retail market, which shrank.

The retailer’s online sales continue to grow and it is poised to capitalise on that trend by launching a new ecommerce platform after Christmas, which will allow it to export to more overseas markets.

Its Tasting Club, which sends new recipes out to customers on a monthly basis, now has more than 100,000 paying members.

And its Boucan hotel attracts former British prime ministers and swathes of celebrity guests to the West Indies on a regular basis.

But it was during Thirlwell’s most recent visit to the picturesque St Lucian location over Easter when he bumped into what was perhaps the perfect guest at the perfect time – his friend Ian Filby, the boss of recently floated furniture retailer DFS.

“The things we are working on may be embryonic and may never turn into anything, but they provide an indication as to the type of research and development we do.”

Angus Thirlwell, Hotel Chocolat

Taking an hour from his hectic schedule to speak to Retail Week over the telephone from a car in central London, Thirlwell recalls his time in the Caribbean and the priceless advice he garnered from Filby, the man who masterminded DFS’s own IPO a year ago.

“We might have had the occasional late-night rum and chat,” Thirlwell chuckles. “He’s a very polished chief executive of a much bigger business than we are, so that was a great opportunity for me. For the cost of a couple of nocturnal rums, I was able to get a lot of really good advice and insight from him.

“The best bit of advice was to always think about the communication before you put it out there – make sure you’re always one step ahead of what you’re telling people.

“As an excitable personality, I know that I do talk about the future quite a lot. I’m not going to stop doing that, but it’s important to contextualise it and make sure that I’m telling people about things we are working on that may be embryonic, which may never turn into anything but provide an indication as to the type of research and development we do within the business. So you’ll find me a bit more nuanced in my messaging from now on, thanks to Ian’s advice.”

With that message at the forefront of his mind, the self-deprecating Thirlwell seems to be getting to grips with life as the boss of a publicly listed company, as talk of Easter trading – Hotel Chocolat’s key period – prompts an uncharacteristically short answer.

He laughs, pauses momentarily for thought and offers: “Unfortunately, all I’m allowed to say is that it was in line with management expectations. I can’t believe I actually had to say that, but there you go.”

For Thirlwell, reining in his exuberant, friendly and talkative nature is a small price to pay in exchange for the estimated £55.5m injection of capital that came flowing into the business following Tuesday’s listing on AIM.

Despite realising a cool £20m each from diluting their equity in the firm, Thirlwell and Harris have retained a 66.6% stake in Hotel Chocolat between them, allowing them to continue to spearhead the retailer’s strategy.

Digital year

Not men to rest on their laurels, however, the duo have already pinpointed three key areas of investment that will become central to the next chapter of their success story as they bid to “strengthen, streamline and professionalise” the business.

Thirlwell highlights building the store portfolio and increasing supply chain efficiency as two of those three core pillars, but emphasises that 2016/17 will be “a digital year” for Hotel Chocolat as he prepares to plough a large chunk of the newfound cash reserves into its online operations.

“We will be investing further in our digital model, taking it from just ‘good’ onto the next level,” he declares. “In the first six months of this financial year, to the end of December, our online sales were 30% up – and that’s pretty organic. The website is working extremely well, but we know we can take it to ‘excellent’.

“Our new website is well under development and it’s our choice now as to when we turn it on. Given that our present website is working so well and we are in the beginnings of planning for Christmas, we think the sensible time to do it is immediately after Christmas.

“One of the big wins we will get from that is that it enables us to do international locations very cost-effectively. You can get a locally translated website for tens of thousands of pounds, whereas previously it would have cost us hundreds of thousands, plus several months of hard work.”

While Thirlwell diplomatically refuses to be drawn on the specific international markets Hotel Chocolat will target through its upgraded digital capabilities, he insists: “Just about any developed economy could be susceptible to the allure of Hotel Chocolat.”

Apologising ahead of a brief hiatus, Thirlwell exits his chauffeur-driven car and makes his way into the retailer’s Rabot 1745 restaurant at London’s Borough Market, proudly describing the scene as he locates a more comfortable pew on the outdoor terrace.

“Bringing the feeling and reality of our cocoa plantation into this arena, roasting beans on the premises, making chocolate from scratch and then making that into brownies – no-one else is doing that.”

Angus Thirlwell, Hotel Chocolat

“This format gets great reviews,” he says. “It’s fashionable, particularly in London, where there are a lot of artisan chocolate-maker start-ups. Being here in Borough Market and bringing the feeling and reality of our cocoa plantation into this arena, roasting beans on the premises, making chocolate from scratch and then making that into brownies, for example – no-one else is doing that.”

Such passion for innovation and entrepreneurialism isn’t unheard of in the Thirlwell family. It runs in the blood, in fact.

His father, Edwin, started Prontaprint, KallKwik and the Mr Whippy ice-cream brand and has provided a constant source of inspiration for his 53-year-old son, who hints that Hotel Chocolat’s listing this week was perhaps always his destiny.

“I was looking back at some of the stuff I had in my study and I saw some old paper cuttings from almost exactly 30 years ago when my dad floated Prontaprint on AIM, so maybe it was something that was ticking away there that just had to happen,” Thirlwell muses.

“He continues to be a really good sounding board, not just for me, but for Peter as well and our country director out in St Lucia.

“He’s an inspiration. He’s in his 80s but is still very excited and very motivated by business and brands. Having somebody with that wisdom so close to our operations in St Lucia has certainly helped us to develop that model into the state it is now.”

Creative inspiration

Despite having taken Hotel Chocolat this far with the help of his father, Harris and the rest of the retailer’s senior management team, Thirlwell is clearly in no mood to ride off into the Caribbean sunset clutching a bottle of rum. He greets the mere idea of taking more of a back seat with a short, sharp laugh.

But with a music taste as varied as his palate for chocolate – his favourite artists range from Sharon Van Etten to AC/DC – Thirlwell jokes that he would have liked a career as a singer-songwriter had his entrepreneurial instincts failed him.

When prompted to draw a comparison between Hotel Chocolat and one of his musical heroes, it is the late David Bowie whom Thirlwell hopes the retailer will emulate.

“He’s an artist who kept evolving, but kept the quality there,” Thirlwell explains. “He always stayed one step ahead, surprised people in a big way and transformed markets. If our brand could ever hold a candle to David Bowie, I’d be very proud.”

Having already hit the right note with customers and investors – and with no sign of his work ethic or enthusiasm waning – you wouldn’t bet against Thirlwell achieving his mission and taking Hotel Chocolat to the top of the world’s retail confectionery chart.

Short and sweet: A bite-sized history of Hotel Chocolat

1988 Angus Thirlwell and Peter Harris begin designing and selling mints as Mint Marketing Company, specialising in corporate gifts. Five years later, they switch their focus to chocolate.

1993 The duo rebrand as Geneva Chocolates and then Choc Express as they start selling chocolates online. In doing so, the business becomes one of the UK’s earliest etailers.

1998 The Chocolate Tasting Club is created as a community of chocolate tasters who receive unique selections each month. The club now has more than 100,000 members.

2003 Choc Express rebrands as Hotel Chocolat.

2004 The first Hotel Chocolat store opens in Watford.

2006 Hotel Chocolat acquires the 250-year-old Rabot Estate cocoa plantation in St Lucia. It remains the only UK business to own a cocoa plantation.

2010 Hotel Chocolat opens its first café in London’s Borough Market, serving a range of cocoa-based food and drinks. It also launches its ‘chocolate bonds’ to fund further development, raising £4.2m from customers, who receive ‘interest’ in the form of chocolate.

2011 Boucan, the retailer’s luxury hotel, restaurant and spa in St Lucia, opens its doors.

2013 Hotel Chocolat unveils two new restaurants in London and Leeds, under the names Rabot 1745 and Roast+Conch respectively, while the business also starts to roll out its cocoa bar-cafés and relaunches its website. It is named Speciality Retailer of the Year at the Retail Week Awards.

2014 Two stores are opened in Copenhagen, funded by a second wave of ‘chocolate bonds’.

2015 Hotel Chocolat opens its first West End store on Regent Street, launches a School of Chocolate at its Copenhagen city centre store to offer chocolate-making experiences to Danish shoppers and publishes its first cookbook.

2016 Hotel Chocolat lists on AIM with a market cap of £167m as its share price is set at the upper end of the anticipated range.

Behind the counter

Who/what is your biggest inspiration?

My amazing wife, living proof that you can be beautiful, clever and good.

Last book you read?

The Advantage: Why Organizational Health Trumps Everything Else in Business by Patrick Lencioni.

Last TV series you watched?

Spin (French TV series Les Hommes de l’Ombre – which translates as ”The Shadow Men”).

Last film you watched?

The Revenant on the flight back from our St Lucian cocoa estate last month.

Favourite artist or musician?

Sharon Van Etten.

What was your last purchase and where did you get it from?

A selector pack of our Going Nuts chocolates from the King’s Cross station store on my way home: hazelnut crunch and melting praline, double-sealed in supermilk chocolate.