Thorntons, which began life a century ago, could recapture its former glories under Ferrero but a deal may hit its store estate.
Thorntons, which began life as a single shop in Sheffield a century ago, has become the latest British confectionery brand to be swallowed by a foreign owner.
The deal for Italian giant Ferrero to pay £112m for the beleaguered retailer and chocolate manufacturer is bitter sweet.
On the one hand there will be those that lament the passing of another British confectioner into overseas hands, following famous names such as Cadbury and Rowntree’s.
And there will be those that will fear for the future of Thorntons’ retail, rather than FMCG, business including the store estate.
But this is probably the best chance the famous brand has to recapture former glories.
Thorntons has been in strategic disarray for years. Caught between its often conflicting wholesale and retail priorities, the brand lost its way.
“Ferrero will be keen to tap into the equity that is still inherent in the Thorntons brand”
Add in the over-expansion of its retail estate and troubled relations with some of the big grocers and it is easy to trace the origins of a variety of damaging profit warnings.
Ferrero in contrast has a management team with a reputation for building global brands that include Nutella and Kinder.
The takeover approach by the Italian business was apparently sparked by its growing success in the UK.
As a canny operator of global confectionary brands, Ferrero will be keen to tap into the equity that is still inherent in the Thorntons brand.
It will also want to leverage the global hunger for ‘Made in Britain’ brands in overseas markets – an opportunity the Italian giant is well placed to make the most of.
The future of the retail estate is less certain. Thorntons’ 242 stores will be looked at as part of a strategic review and Ferrero has no history in retail.
However, there is a compelling case to retain a retail presence. Whether it’s their role as brand flagships, a direct channel to consumers or the potential to extend the in-store offer, Thorntons’ shops could deliver value for Ferrero.
The challenge will be for the new owners to make a better go of it than some of Thorntons’ former chiefs.
Sebastian James tops the Power List
Dixons Carphone chief executive Sebastian James’s ascent up our annual Power List will no doubt prompt debate.
But over the past year surely nobody has made more of an impact on his company or the industry as James after pulling off a mega-merger that looks likely to deliver profits ahead of expectations in year one.
James looked into the future and had the bravery and conviction to build a business based on what he saw, and believes will stand the test of time.
He is also one of the most modern of retail leaders. Forward-looking, unstuffy and able to bring business vividly to life through his eloquent turn of phrase, his influence has been felt across the industry and beyond.