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UK's Hotel Chocolat looks to Japan, US for more growth
[LONDON] Hotel Chocolat will open shops in Japan and the United States later this year, the British chocolatier said on Tuesday, targeting international expansion to drive its long-term growth after profit climbed 13 percent in its latest financial year.
The company, which makes chocolate and sells it from about 110 stores in Britain plus a handful in Denmark, said it was aiming to become a global brand that could compete with the likes of Godiva, part of Turkish food giant Yidiz Holding.
Hotel Chocolat's co-founder and CEO Angus Thirlwell said the expansion was about "firing up the medium to long-term growth strands that are going to lead to us becoming the global leader in premium chocolate."
But he added there was still room to grow in Britain.
For the year ended July 1, Hotel Chocolat reported pretax profit of 12.7 million pounds (S$22.67 million), 13 per cent higher than last year, on revenues that were 11 per cent higher at 116.3 million pounds.
With a little more than six months before Britain leaves the European Union, the main impact of Brexit on Hotel Chocolat has been from the fall in the value of the pound, increasing raw material costs.
The CEO said it had so far managed to offset those through improvements to productivity and from increased scale and the company, which manufactures 97 per cent of its product in Britain, would continue to do that.
Having already signed a franchise deal for the brand's Scandinavian expansion, Thirlwell said Brexit was not the reason why Hotel Chocolat was seeking to expand in Japan and the United States before some other parts of Europe.
"We do see huge opportunities in Europe as well and the right time will come to do that," he told Reuters.
Japan and the United States were attractive destinations because many shoppers from those markets visit stores in London and Hotel Chocolat online, Thirlwell explained.
Shares in the AIM-listed company, which has a market capitalisation of 380 million pounds, were up 2 per cent to 345 pence after the results.
Liberum analysts said they were confident that Hotel Chocolat would be successful in new markets.
"There are more catalysts now than any other time in the group's past, so confidence in forecasts is high," they said in a note.