Hotel Chocolat has secured additional banking facilities after increased online demand failed to offset the hit to sales from the closure of its stores during the coronavirus outbreak.
The chocolatier has agreed a new £35m revolving credit facility with Lloyds Bank. This has replaced its existing £10m overdraft facility and follows the retailer’s equity placing in March through which it raised £22m to fund growth in capital investment and provide operational headroom.
Angus Thirlwall, the firm’s Chief Executive, said: “Hotel Chocolat is a strong brand with differentiated products, a loyal customer base, and a vertically integrated direct-to-consumer business mode, built for agility. It is a reflection of these attributes that we have been able to add additional banking cover to the over-subscribed equity placement in March.
“The financial headroom gives us greater resilience against ongoing disruption and enables us to move onwards with longer-term growth opportunities.”
The company confirmed that the closure of all its retail stores due to the coronavirus lockdown has had a material impact on its trading, especially over Easter.
Hotel Chocolat has been able to redirect some of the demand for its products to online, although this has not fully mitigated the total retail sales loss in its key three-week Easter period.
Thirlwall commented: “Our market leadership in digital and subscription chocolate is more valuable than ever and we will accelerate the planned innovations and investments behind these models. Plans are in progress to re-open our physical locations when appropriate, with adjustments in place to make shopping with us safe and pleasurable again.
“With the plans we are putting in place over the next months, we aim to be able to switch the vast majority of demand to online should the need arise in the future.”
