Hotel Chocolat eyes up more sites in Yorkshire
'‹'‹Profits at luxury chocolatier Hotel Chocolat have doubled despite what it described as "challenges and uncertainties in the wider economy" as it scours for new sites across Yorkshire.
The group is looking for more sites in the county as its Yorkshire stores are among its best performing sites following the success of its new store in Beverley.
The group currently has seven locations in Yorkshire and believes it could double the number of stores in the county.
Co-founder and chief executive Angus Thirlwell said the group is looking to open more sites in Leeds and York, as well as market towns throughout Yorkshire.
"We'd like readers to us about good sites in market towns," he said.
"If we could find another 20 Harrogates, we'd be very pleased. Harrogate is performing very well, as is Beverley."
The group is also talking to the White Rose shopping centre and plans to open a store there if it can find the right site.
Mr Thirlwell said the economic challenges include currency-based inflation headwinds and weakness in the economy, although these factors have had no impact on Hotel Chocolat's sales.
"There is no sign of people trading down," he said.
"The average order value is creeping up. In online it stands at £30 during the year, rising to £50 or £60 at Christmas. Retail is half that amount.
"Once you get a taste for Hotel Chocolat, more cocoa and less sugar, you don't want to buy rubbish again. Once you get a lifestyle standard you don't retrench. You may defer a big extension to your home or a new car, but our security is we offer affordable luxury."
He was speaking as the group announced a 100 per cent rise in pre-tax profits to £11.2m in the year to July 2, while revenue rose 12 per cent to £105.2m.
Hotel Chocolat pointed to the success of its in-store experiences, such as "chocolate lock-ins", where small groups of ticketed customers are allowed into stores after closing time for tutored tasting and nocturnal private shopping.
It also said its "hedonistic" chocolate is made with more cocoa and less sugar, which is helping meet demand for healthier treats.
"The Hotel Chocolat brand has continued to strengthen and we have made excellent progress with our three strategic priorities of investing further in our British chocolate manufacturing operations, growing our store estate and developing our digital offering," said Mr Thirlwell.
"Given the encouraging performance of our retail and internet channels, along with the pipeline of opportunities ahead of us, we are confident of further growth."
Another area of growth is Hotel Chocolat's new "shop+cafe" format.
Mr Thirlwell said this Christmas will see the group release its biggest seasonal offering.
These will include a range of advent calendars, including a weighty, top of the range calendar selling for £68 which includes a small bottle of salted caramel vodka.
"That will be a good morning for anyone opening their calendar," noted Mr Thirlwell.
Other calendars include a 100 per cent cocoa calendar for £12 and a children's advent calendar for £8.
Analyst Wayne Brown at Liberum said: "Hotel Chocolat’s success centres around a strong brand identity, a rapid pace of innovation and a clear grasp of who its customers are and what they want.
"Hotel Chocolat is financially well positioned to grow and operates within expandable consumption markets, with a powerful brand, and differentiated products. It holds an important position within its consumers’ repertoires. The company is growing share in growing markets."
Hotel Chocolat said it has signed six new wholesales relationships, including Amazon, Ocado and Fenwicks department stores.
Market research conducted by the company has consistently shown that UK consumers cite “lack of access” as the main barrier to purchasing more from Hotel Chocolat.
To address this issue and to access the 19 million Prime shoppers in the UK, a relationship with Amazon started a few weeks ago. The group has started with a collection predominantly focused on the gifting market. There are 30 lines with a price range of £10 to £50.