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Shares in luxury retailer Hotel Chocolat plummeted 42% in early trading this morning as the chocolatier’s strong UK sales were overshadowed by setbacks in its overseas operations.
In a trading update the company said it expects to make a loss after taking a £3 million hit from closing all five of its US stores in a “difficult” trading period. It may also have to write down the value of a £23 million loan from its ailing Japanese business. The company continues to sell products in the US online.
“Outside China, Japan was the first major economy to go into Covid so it’s the last really to come out, and that’s had a tough effect on the performance of the business,” Hotel Chocolat CEO Angus Thirlwell told the Standard.
“We’re adopting a more prudent approach and keeping the capital at a constrained level.”
The firm’s UK sales grew 35% in the year to 26 June 2022, led by growing online sales, as the company opened a new store in Norwich.
Thirlwell said the firm continued to see customer loyalty for its upmarket products despite continued food price inflation.
“The UK market is really performing well, and our stores are in a much better shape than they were during the pandemic,” he said.
“Our online business has tripled during the pandemic and is still growing despite these difficult times -- a little bit of chocolate makes everything better.”
Founded in 2003, Hotel Chocolat has 150 stores worldwide, according to its most recent annual report.