Hotel Chocolat to take a bite of US and Japan as profits grow
The retailer is eyeing new markets as its UK business continues to expand.
Hotel Chocolat has announced plans to launch in the US and Japan as the retailer booked a healthy rise in annual profits.
The chocolatier notched up a 13% rise in pre-tax profits to £12.7 million for the year to July 1 and beat market expectations as annual underlying earnings jumped 16% to £18.9 million.
It saw revenues grow 11% to £116 million across its 113 stores and online operations.
We are increasingly confident that international expansion presents a growth opportunity Angus Thirlwell, Hotel Chocolat co-founder
The UK-based company now has its sights set on global expansion, announcing three new international ventures since the period end in Scandinavia, Japan and the US.
Co-founder and chief executive Angus Thirlwell said: “We are increasingly confident that international expansion presents a growth opportunity, and will be adopting a cautious ‘test, learn, grow’ approach to our new partnership in Scandinavia and our new ventures in the US and Japan, where we intend to open our first stores this winter.”
The company’s non-executive director Greg Hodder will be heavily involved with the US strategy, having previously overseen the growth of British brands such as Charles Tyrwhitt in America.
In the Japanese business, former QVC Japan boss Chris Horobin will lead a joint venture in which Hotel Chocolat will initially hold 20% and local management the remaining 80%.
Shares lifted 2% as analysts welcomed the revved up expansion plans for new markets.
“Hotel Chocolat’s affordable luxury, ‘more cocoa, less sugar’ offer and broad, unique ranges position it well to disrupt the incumbents in new markets,” said Wayne Brown at Liberum.
Domestically, the company bucked high street gloom by opening 15 new stores in the UK and Ireland, and expanded the number of combined shop and cafe sites to 30.
And on the wholesale side, the company struck deals with Amazon, Ocado and QVC.
This came after consumers cited “lack of access” as a barrier to purchasing more from the retailer.
It is also set to trial wholesale deals with two new partners in time for the busy Christmas period.
Emma-Lou Montgomery, associate director from Fidelity Personal Investing’s share dealing service, said the results showed a glimmer of hope for some of Britain’s retailers.
She said: “Opening 15 new stores in such a tricky trading period was no mean feat.
“And down-playing its original subscription-based customer model and driving sales into stores shows how niche, high-end retailers remain a crucial part of the UK retail sector.”