British chocolate chain plans new assortment of stores

Offerings from UK chain Hotel Chocolat. Photo / Supplied

Retailers who open for business overseas have to adapt to local tastes and customs.

For Hotel Chocolat, the UK high-street chocolatier which opened three stores in Bahrain, Kuwait and Dubai through a franchise partner this year, the ban on alcohol in the region means its champagne truffles are unlikely to make an appearance.

But Angus Thirlwell, co-founder and chief executive of the 42-store chain, says: "People in the Middle East typically have a very good diet and our style of chocolate seems very appealing to them."

Plenty of UK consumers also seem to be getting a taste for the premium chocolate of Hotel Chocolat, whose mantra is "less sugar, more cocoa".

The retailer delivered earnings before interest, tax, depreciation and amortisation up by 31 per cent to £3.8 million ($8.08 million) for the 12 months to June 30 last year.

It followed this with another strong set of results this year, driven by double-digit underlying sales growth in the first half of the year, said Thirlwell.

The chocolatier, which sells chocolates ranging from a luxury Christmas hamper for £300 to its Purist Bar of 100 per cent cocoa for £5, has come a long way since its humble beginning in the early 1990s.

Thirlwell and Peter Harris, the retailer's finance director, started Chocexpress, a mail-order firm selling to companies.

Their original goal was simple: "To make a better type of chocolate available to UK consumers bored by the mediocrity in supermarkets and on the high street". But they rebranded it Hotel Chocolat in 2003 and opened a first shop the next year.

Today the firm, which operates a factory in Huntingdon, Cambridgeshire, and a 56ha cocoa plantation in Saint Lucia - generates turnover of around £50 million from its high street, wholesale and multi-channel operations.

It is now embarking on the most ambitious phase of its growth strategy - boosted by the £3.7 million raised through its innovative "chocolate bond" this summer. In the remainder of this year, it will open eight new stores, including in Manchester's Trafford Centre and in a new centre next to St Paul's Cathedral in London.

Its plan is to get to 70 UK stores over the next three years and push ahead with more in the Middle East.

Hotel Chocolat will use the funds to expand its tasting club overseas, invest in Huntingdon - creating up to 250 jobs over the next five years - and in Saint Lucia, including a new factory on the estate that will use solar power and rain harvesting.

In May, the retailer offered the three-year bond - the return is paid in deliveries of chocolates, typically each month - to 100,000 members of its tasting club. Members could invest £2000 for a gross return of 6.72 per cent or £4000 for 7.29 per cent.

Hotel Chocolat, which also has two stores in Boston, Massachusetts, had aimed to raise a maximum of £5 million from the chocolate bond, but Thirlwell was bowled over with the participation of 1700 members.

Thirlwell dropped out of university and spent two years in France enjoying the cuisine before he met Harris at a computer firm in Cambridge. Thirlwell's father, Edwin, who trained as an engineer, co-founded ice-cream firm Mr Whippy.

To describe Thirlwell as passionate about chocolate could be the understatement of the century.

"I eat chocolate two to three times a day - half for pleasure, half for work. I still approve every single chocolate recipe we do. I think it is important and I enjoy it."

- INDEPENDENT