Hotel Chocolat said it will scale back sales in the run-up to the Christmas holiday season after it swings to an annual loss, but stressed that it remains on track for its busiest December yet.
The luxury chocolate maker said it plans “discounted discount levels” and will sell more full-priced products, as it targets sales that focus on “quality over quantity” this month.
The company said it was confident shoppers would continue to spend their stretched budgets on “affordable luxuries”, including Christmas gifts from £2.50 to £8.50.
It came as the company reported a loss of £9.4m before tax for the year to June, after a series of one-off costs linked to the closure of high street stores in the US, as well as the restructuring of its joint venture in Japan. These costs offset a 37% increase in revenue over the period to £226m.
Analysts had expected Hotel Chocolat to report profit of £9.6m, compared to £3.7m a year earlier.
Co-founder and CEO Angus Thirlwell tried to sound a hopeful note, saying that cutting price sales is the right strategy for the company, which remains on track for a strong December.
“As we head into the busiest part of the year, I am confident that the strategic direction we have set will improve the business prospects for years to come,” Thirlwell said.
“Our decisions to focus on full-price sales and quality over quantity, along with the return of physical store performance, means we expect December to be busier than ever.”
He said that despite the deteriorating economic environment, with high inflation reducing the spending power of households across the UK, people still treat themselves and remain loyal to the brand.
“The Hotel Chocolat brand resonates greatly with shoppers and despite the macroeconomic environment, people still treat themselves to affordable luxury, remain loyal and we win new customers who recognize our quality,” said Thirlwell.