Hotel Chocolat is not as profitable as it once was, so is refocusing on its home market to manage supply chain costs and reduce spending on less profitable ventures abroad. “Together with near-term cost inflation this will lead to some short-term forecast pain for FY’23 but lays the foundation for the deliverability of c.20% EBITDA margins within three years’ time,” he added. Liberum analyst Wayne Brown said in an analyst note today: “FY’23 will be a transitionary period as the business will reshape accordingly and pair back investment in some of its newer ventures.” The company is scaling back, cutting investment in its US and Japan joint venture, and focusing on low capex product lines such as the new Velvetiser hot chocolate and cream alcohol ranges, it indicated in a statement today. Noel Quinn, group chief executive of the bank, said in a statement at the time that the bank simply “lacked the scale to compete”.įollowing Hotel Chocolat's backfired expansion into the US and Japan, it could be a case that things get worse for the chocolate seller before they get better. Last May, HSBC announced that it had exited the US market for retail banking. Since selling off its airport division WHSmith USA Travel Retail to Hudson Group, WH Smith has since attempted to revive its offering in the US market through its travel venture InMotion. Sainsbury’s attempted to launch in the US market in the eighties and nineties, but its food and drink sales were dwarfed by its home market.
Its retreat followed similar US market entries that have failed to take off by J Sainsbury PLC (LSE:SBRY), Marks and Spencer Group PLC (LSE:MKS) and WH Smith PLC (LSE:SMWH). Tesco PLC (LSE:TSCO) famously attempted to expand across the pond in 2006, but exited the market seven years later, selling its stores to Yucaipa Companies. Its exit from the US market follows a swathe of retailers that have headed over the Atlantic and failed to make their mark. Hotel Chocolat now operates just one store in the US that is anticipated to close next year as it moves towards selling products online. It said it expects to report a statutory loss for 2022 “predominantly as a result of non-cash impairment provisions and costs arising from discontinued activities including the closure of retail stores in the USA”.
#Hotel chocolat usa update#
This morning the chocolate brand warned in a trading update that its balance sheet was significantly affected by the cost of closures in the States. Hotel Chocolat Group PLC (AIM:HOTC) has become the latest British retailer to crash and burn in the United States market.
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