The new chief executive of Thorntons has been drafted in to sweeten its retail sales, revamp the product offer and take a bite out of the competition.
Want to know more about Thorntons?
Chocolates specialist Thorntons has a problem. Consumers love the retailer’s goodies but they are increasingly buying them from supermarkets and other stores rather than Thorntons’ own shops.
But the growth of Thorntons’ commercial sales through other shops comes at the expense of margin, while revenues through the company’s shops - a vital profit centre - are on the slide. They were down 5.2% in the first half, the retailer revealed last week, in what amounted to a profit warning.
Reinvigorating the retail division will be top of the ‘to do’ list for new chief executive Jonathan Hart, placed in the role by headhunter Odgers Berndtson, and who the retailer hopes will become its very own Willy Wonka.
He was enlisted explicitly for his retail skills, in contrast to predecessor Mike Davies who brought experience garnered at brands such as Mars to the business.
Hart brings to the task wide-ranging experience from banking to hypermarkets but it is his experience of small-store retailing, including stints at Dixons and, most recently, Caffè Nero, that are likely to prove most useful at Thorntons as it reshapes itself for the future.
“His experience of small-store retailing is a real plus,” says one analyst. “He was brought in to sort out the estate and whether he can bring the excitement and experience of coffee drinking to chocolate is his key challenge.”
Hart said he will take a “forensic”, store-by-store look at the Thorntons estate. Some closures are likely, but relocations and lease changes will also be important.
One person who knows Hart says there will be no panic-stricken measures and describes him as “unflappable”. The source says: “He’s affable and comes across as quite reflective and has quite a dry sense of humour.”
Another observes: “He comes across as very measured. He has a good depth and breadth of retail experience.”
While amenable, Hart does not suffer fools gladly. “He can be quite sharp in his retorts,” observes one source. “He’s very resilient - you don’t spend the length of time he did at Dixons if you’re not.”
As well as ensuring Thorntons has the right number of shops on the right terms in the right places, Hart is expected to bring more excitement to the product offer because younger retail businesses, such as Hotel Chocolat, are eating Thorntons’ lunch - or perhaps that should be its pralines.
Thorntons celebrates its 100th anniversary this year, providing an opportunity to enable shoppers to reassess and reconnect with the brand, which some think has been damaged by piling its products in the supermarket aisles.
“They’re dancing with the devil,” argues one observer. “Once you’ve got into bed with Tesco…”
Thorntons has pledged to devote more attention and energy to product innovation, especially on seasonal lines. Evidence of a new energy could come as early as Easter, when consumers stock up on choccy eggs - last year Thorntons did well with personalised eggs and similar innovations are likely this year.
Some familiar with Thorntons wonder whether there is scope to introduce complementary product lines other than the retailer’s own products and speculate about the eventual likelihood of a parting of ways between the company’s retail and supply and manufacturing operations.
The challenge for Hart, one person says, is to replicate what Caffè Nero achieved and give Thorntons’ chocolates the same kudos as a discretionary but affordable cappuccino.
On Hart’s LinkedIn page there is a reference from former Dixons colleague Bryan Magrath. It reads: “More creative than Leonardo da Vinci on a good day.” That’s stretching it but, even on a more modest level, a bit of creativity retail artistry and invention would not go amiss at Thorntons.
One of Thorntons’ former master chocolatiers famously left the business after visiting a rival’s store and squashing the truffles. Metaphorically, Hart will want to do the same - but he is likely to go about it in a more sophisticated way.