Chief executive to leave as Thorntons warns on profits

A new chief executive “with specific retail expertise” will be appointed, in the light of poor performance at company-owned shops.

Davies will remain in post until a new boss is found, and chairman John von Spreckelsen will assume executive responsibilities.

Thorntons said that since it last updated in April 20, “the company has continued to experience a tough trading environment in own stores” and that there had been a “temporary decline” in sales of Thorntons’ product through other retailers.

The retailer said: “Own store sales have continued to experience like for like sales declines together with higher than anticipated discount costs on clearing excess stocks.

“Commercial sales were also lower than expected during the end of April and early May but have since recovered to previously forecast levels.”

Thorntons said that in the last four years, Davies led its restructuring and “significantly improved its manufacturing operations, the product range and the performance of its commercial channel” and that during his time in charge  it had “increased its branded market share and grew sales year on year”.

Execution Noble analyst Sanjay Vidyarthi said: “We have highlighted before the tension that Thorntons faces between own store and supermarket sales.

“While management has acknowledged in the recent past that the number of won stores needs to reduce, it has not accepted the need for radical action.

“Part of the rationale for Mike Davies’ retirement is acknowledgement that a different skills set and strategy may be required for the next phase in Thorntons’ history.”

Thorntons will update on trading fully on July 14.