Thorntons

THORNTONS

Type	Public
Traded as	LSE: THT
Founded	Sheffield, South Yorkshire, England (1911)
Founder	Joseph William Thornton
Headquarters	Alfreton, Derbyshire, England
Number of locations	249 (plus 186 franchise shops)
Key people	Paul Wilkinson (Chairman) Jonathan Hart(Chief Executive)
Revenue	£221 million (2013)
Operating income	£5.2 million (2013)
Net income	£3.8 million (2013)
Owner	Ferrero SpA (£112 million sale announced, June 2015)
Number of employees	just under 4000[1]
Website	thorntons.com

Thorntons is a British chocolate company established by Joseph William Thornton in 1911. Turnover in its annual report of 2013 was reported at £221 million with 249 shops and 186 franchises together with internet, mail order and commercial services. When Cadburys became part of a non-confectionery specific group, Thorntons became the largest confectionery-only parent corporation in the United Kingdom; while it retains a minority of sales of its established toffee and fudge, the group shifted its specialism, after post-war rationing ended, into chocolate and developed wide Continental, Swiss and Belgian chocolate ranges which (alongside novelties and decoration) form the bulk its sales.^[1][2] It is listed on the London Stock Exchange and is a constituent of the FTSE Fledgling Index. While cutting back on its high street presence, sales and production have increased and a small minority of its shops have started afresh or diversified to become cafés.^[1] In June 2015 Thorntons was bought by Ferrero SpA for £112m.^[3]

The Thornton family

This outlet plays on the brand's long history by being unusually housed in a former tram shelter in Gunwharf Quays, Portsmouth, Hampshire.

A Thorntons shop in Banbury, Oxfordshire.

The Thornton family lived in Leeds for many years having various occupations from shopkeeper to innkeeper until eventually Joseph Thornton, born 1832, moved south to become a railway shopkeeper in Sheffield. He married in 1868 and two years later Joseph William Thornton was born.^[4]

Joseph grew up to become a commercial traveller with the Don Confectionery Company and opened his first Thorntons Chocolate Kabin shop in October 1911 on the corner of Norfolk Street and Howard Street in Sheffield. At that time the family was living in rented property in the nearby Derbyshire village of Hathersage.^[5]

The flagship store

It was Joseph William’s intention to offer the nicest sweet shop in Sheffield.^[6] The walls inside the shop were covered in fashionable cream anaglypta wallpaper. There was a beautifully shaped glass case from which Kunzle cakes were served individually with tongs. Trays of Mackintosh's Toffee Deluxe were broken into pieces by assistants using toffee hammers and pincers and put into waxed bags on the brass weighing scales. Behind the counter there were mirrors from floor to ceiling, giving the shop a classy air and making it seem much bigger than it actually was, with glass shelves for the knock-stoppered jars of caramels and boiled sweets. Other now-unfamiliar products included Cachous, Violet Cachous, Sweet-Lips, Phul-Nanas and the descriptively-named Curiously Strong Mints.^[7]

Joseph couldn’t afford to give up his job at the Don Confectionery Company at the time and he prudently retained his job as a commercial traveller until 1913 to guarantee himself an income. Instead he decided to take his son Norman out of Abbeydale Secondary School when still only 14 to become manager of the shop when it opened. The other members of staff were two young ladies "of a very superior type" who doubtless gave the shop the necessary atmosphere of quality that Joseph sought. There must have been great relief in the family when the shop opened successfully; taking £20 a week, "quite a lot of money….in those days". It was successful enough to persuade Joseph in 1913 finally to leave his job and risk opening another shop.^[8]'

The Moor store

The Moor would be the next best place because the rents would be lower and there were considerably more passers-by. It was here in the basement that Joseph began some simple manufacturing of his own products, he would demonstrate to Norman how to make simple boiled sweets such as Fish Mixtures and Mint Rock. In a back room on the ground floor of the shop there was sufficient space to start manufacturing chocolates.^[9]

The family left the rented house in Hathersage and moved into rooms above the shop, thus efficiently combining retailing, manufacture and accommodation under one roof. Norman’s youngest brother Stanley obtained a scholarship to Sheffield University to study Chemistry and Physics but because the family was so short of money he was under pressure to relinquish his university place and join his brother Norman in the business. Helpfully, the University allowed him to attend on some evenings and on Saturday mornings to study food technology and this later became a very valuable asset to the business.^[10]

J. W. Thornton Ltd

Joseph William Thornton became ill in 1917 and died in 1919. The business was taken over by Norman Thornton at age 21, who tried to consolidate trade in the two shops. In 1921 Stanley and Norman Thornton formed a limited company called J.W. Thornton Ltd with themselves as the two shareholders to secure the family business.^[11]

1923 to 1931 – expansion and toffee

In 1923 economic conditions started to improve and the Thornton brothers opened two more shops, on London Road and Rockingham Street, both busy locations, thus doubling the number of outlets and production.^[12]

The London Road property was put up for sale for £5000 not long after Thornton's rented it so to avoid losing it they agreed to buy it in instalments of £250 a year. They increased sales to cover the increased costs by the gimmick of personalising Easter eggs by writing people’s names on them.^[13]

Up to 1924 Thorntons were selling Mackintosh's Deluxe Toffee but sales were modest. The brothers felt they could improve on this by making their own toffee. Stanley used his university experience to develop a home-made toffee. Despite the relatively high price of 6d (2½p) a quarter pound (114g), it soon made up half of the total sales of the business and remained the company’s mainstay for the next 50 years, such that in many people’s minds the words ‘Thorntons’ and ‘toffee’ became synonymous.^[14]

During the difficult period of the 1920s a Special Toffee was introduced along with an increasing variety of chocolates, accompanied by vigorous promotions, such as ‘Saturday Specials’. A further two shops opened in 1926, the year of the General Strike, one in neighbouring Rotherham and the other on Union Street. The Rotherham shop was the first outside of Sheffield and was a great success but the one on Union Street was less so and became the company’s first failure, closing within a year.^[15]

The brothers now split their responsibilities with Norman managing the shops and administration and Stanley the manufacturing. In 1928 a new shop was opened in Castle Street followed in 1930 by shops in Leopold Street and Spital Hill, all in Sheffield. The latter soon closed, but a city-centre shop in Fitzalan Square opened in 1931 was very successful.^[16]

Thorntons in the 1930s

By the early 1930s Thorntons felt their successful formula could be expanded over the North of England and possibly Scotland. They remained unsure of the South, believing that consumption of confectionery was linked to average ambient temperature, and that Southerners would not buy a Northern product. (These assumptions proved to be unfounded.)

A Manchester shop opened in 1932 on Oxford Street, only the second branch to open outside Sheffield. It was followed by a shop at 37a Boar Lane in Leeds, the area the family originally came from.^[17]

In 1934 a purpose-built factory was built in Archer Road, four miles (6 km) south of the city centre with cleaner air and closer to the countryside. Two years later it was doubled in size.^[18]

Impact of World War II

War was declared in September 1939. Suddenly the steel works in Sheffield were busy again. This led to a boost in other regional businesses, including Thorntons, although this was short-lived, offset by other negative factors, chiefly the shortage of raw materials, particularly cane sugar which of course always had to be imported. Confectionery was quickly rationed to a mere two ounces a week. Staffing in the retail shops was reduced as individuals, male and female, left for military service.

The company had opened eight new shops in the year before the start of hostilities making a total of 35 shops in 18 towns. While having more stores helped sales through rationing, this did not end until February 1953 in respect of sweets and later that year in respect of retail sugar, and therefore the company struggled to increase sales to individuals through this period. The war put paid to any further expansion for at least ten years. Indeed, some shops were actually lost, either through expired leases or air raids. There were at least 30 instances of retail premises suffering war damage. The night of 1 and 2 June 1940 was just such an occasion when three of Thornton’s shops in Manchester were heavily bombed and reduced to rubble. The branch on Mosley Street in the heart of the city was a particular loss as the brothers were extremely proud of this very successful, large branch with five display windows.^[19]

Later that year in Sheffield heavy bombing on the night of 12–13 December destroyed much of The Moor including the shop where the family had once lived and the shops on London Road. The Thorntons factory on Archer Road was only superficially damaged but gas, electricity and other services were lost for seven weeks. With some remarkable forethought, the brothers had anticipated such a contingency and had recently acquired a small bankrupt factory in Lancashire to transfer production there if necessary.^[20]

Post-war expansion and Walter Willen

After the war Thorntons considered further expansion. An application for a building licence to extend the Sheffield factory on its quarry site was refused because of the very great shortage of building materials and skilled labour. One of the brothers saw an advertisement in a local paper offering a factory in a place called Belper in Derbyshire about 35 miles (56 km) to the south. They successfully acquired the building in 1948 for £8,400 but signally failed to notice that Belper had the lowest rate of unemployment in the country.^[20]

Norman had three sons, Tony born in 1927, Peter in 1933 and John in 1943. Stanley had one son, Michael born in 1936. Tony Thornton joined the business in 1948 and initially worked at the factory in Belper, after about 5 years he began to take over retail management from his father, Norman. Peter joined in 1953 working also at the Belper factory in the vacations from the London Borough Polytechnic where he was studying Chocolate and Sugar Confectionery. He finished the course in 1954 and then joined the business full-time.^[21]

By this time the company saw rewards from several differential advantages over competitors:

• Rigid rules for the products
• Rigid rules for running the retail business which were always followed at each new retail location
• Its Special Toffee product
• Writing names on Easter Eggs
• The new product from 1954: the Continental Chocolates range.^[22]

In early 1954, Walter Willen, a young Swiss confectioner, came to work for Thorntons. He came originally just to learn English, possibly to stay for a year and then go home. Fortunately for Thorntons he remained until his retirement. Walter set to creating a new range of handmade confectionery called Swiss Assortment. Such beautiful pieces, round spiky milk and plain chocolates, slices with layers of nut paste, pineapple fourée and everything else. Eventually the name changed to the Continental Assortment because the Swiss Embassy complained. Stanley Thornton worked closely with Walter during this period so that the recipes could be adapted more to the English taste.^[23]

1956 to 1968

In 1956 Beryl 'Jean' Willis became manager of one of the Thorntons factories. She died at the age of 86 in 2011.

In July 1956 Egypt nationalised the Suez Canal. The Prime Minister, Sir Anthony Eden, considered invading Suez, a concept that aroused international consternation and Peter was recalled into the army to await the expected invasion. He was finally released after nine months in the Reserve Army in December 1956 having seen nothing more than Aldershot.^[24]

In January 1957 Peter became manager of the Chocolate Department in Sheffield and Michael Thornton joined the business in the same year. By this time also Tony had started to take over responsibility for retail management from Norman and became fully responsible by 1960 as Retail Director. In 1962 Peter became Production Director and Michael assumed responsibility for Company Secretarial duties, Administration and Finance.^[25]

From then on great strides forward were taken by the new young family management team. Tony improved the shop designs, display and management generally whilst at the same time rapidly expanding the chain. Peter greatly improved productivity, mechanisation, quality management, production capacity and personnel management systems. Particularly the ‘Factory Council’ unanimous voting representative system was introduced, based on the Glacier Metal system. The Council agreed Terms of Employment and wage rate banding, the result of this and many other measures was outstanding industrial relations. Michael reviewed and refined the administration and financial control systems.^[26]

By 1967 the business had nearly 90 shops making a profit of almost £250,000 on a turnover of over £1.7 million. (That would translate in today’s finances to a profit of almost £3 million).^[27] The capacity of the Belper factory became a limitation on further expansion but it was very fortunate that Thorntons were able to purchase adjacent land and property to continue the expansion with new buildings.

John Thornton joined the business in 1967; he obtained an engineering degree at Cambridge and then worked for a year in Germany at a confectionery machinery manufacturing company for his practical experience in order to complete his studies.^[28]

Production for Marks and Spencer and franchising

In 1968 Norman Thornton finally gave up his chairmanship of the company and Tony and Stanley became joint Managing Directors. The company began manufacturing for Marks and Spencer under the latter's trading name and started the franchising system which made retailing in small towns possible.^[29]

In 1978 a management re-organisation took place when Peter moved to retail management and John took over as Production Director, this was changed again after another year when John became a joint Managing Director in charge of Operations taking responsibility from Peter, thereafter responsible for Sales and Marketing.^[30] Peter then worked together with Professor Peter Doyle of Bradford and later Warwick University to carry out a retail re-positioning exercise which was eventually very successful the company making a net profit of 11.75% in 1981 equivalent to £6.23 million in current terms.^[31]

Thorntons in the 1980s

Tony and Peter Thornton now started to investigate the opportunity to purchase a business in the USA as a diversification, this entailed many visits across the Atlantic taking Peter away from his role as Joint MD for retailing. John asked the Board to appoint him as sole MD in view of this. It was agreed and Peter then became Group Development Director in 1981. In October 1982 Thorntons opened their first shop in the USA in Water Tower Place shopping mall in downtown Chicago. This was followed by another shop in Woodfield Mall about two weeks later.^[32]

A further momentous decision was taken in 1982 which was to purchase a large piece of land in the outskirts of Alfreton in Derbyshire for the construction of a new factory which started in 1983. Factory capacity at Belper and Sheffield was now nearly fully utilised and provision had to be made for further space.^[33]

Tony Thornton retired in January 1984 and Peter became Chairman, Phase 2 of the construction of the new factory started in the middle of that year. By the end of 1984 the company had six shops now trading in the USA but it was still failing to achieve that elusive profit. On 3 November 1984 Norman Thornton died. On 15 March 1985 the new factory at Alfreton was opened by Queen Elizabeth II.^[34]

In late December 1986 the decision was taken by the Board to seek a public listing for the business to take place probably in October 1987. Peter Thornton resigned from the company in July 1987 and the public listing took place the following year, 1988 when the profit reached £15.045 million (in current terms), a margin of 14.37%.^[35]

The Thornton family have continued to play an active role in the business, and it was only in 1996 that a non-Thornton CEO (Roger Paffard) was appointed.

2000s – trading difficulties

The now former CEO Peter Burdon (who left the company in September 2006), proposed a management buy out in February 2004, though this was not successful. Two months later, John Thornton announced his retirement from chairmanship in April 2004.

Following a period of rapid expansion, latterly seen by many as over-trading, the 2009 results showed turnover increasing to £214.8 million, but operating profit decreasing to £7.94 million. There is still a significant impact of seasonality on the sales demand and a number of strategies have been undertaken to attempt to address this issue – however, 35% of sales are still in the seven-week period before Christmas and a further 10% before Easter. The impact of this on both manufacturing and service are significant, with temporary staff covering positions.^[36]

In January 2011, Jonathon Hart joined the business as CEO. Following a resultant strategic review in June 2011, Thorntons announced it would close between 120 and 180 of its shops.^[37][38]

In June 2015, it was announced that Italian chocolate maker Ferrero would buy Thorntons for £112 million.^[39]

Use of imperial measures

Thorntons is notable for its continued use of traditional imperial weights and measures on nearly all of its chocolate packaging. Metric measures are also shown, as required by law. The imperial measures, expressed in lb/oz measures, are of equal size to their metric equivalents and are no more prominent than the metric measure. They are therefore lawful as "supplementary indications".

Formerly, chocolates sold loose were priced per 100 grammes from 2000, however are now prices are per chocolate.

Publicity

Some advertising slogans:

"Chocolate Heaven Since 1911"

"The Art of The Chocolatier"

"It's the Thorntons that counts"

On 3 April 2007, Thorntons set up what is thought to be the world's first edible billboard. The 14.5 ft by 9.5 ft (4.4 m by 2.9 m) and 390 kg (860 lb) sign was erected outside their Covent Garden, London shop, and was devoured by eager passers-by within 3 hours.^[40] The structure included 10 chocolate bunnies, 72 giant chocolate eggs and 128 chocolate panels, each weighing 2 kg. The publicity stunt was decided following poor Christmas 2006 sales.

See also

• List of bean-to-bar chocolate manufacturers

References

Citations

• The Strategy Report of Thorntons plc, Birmingham Business School, 2007
• Thorntons, My Life in the Family Business by Peter Thornton, Published by Tomahawk Press, October 2009 ISBN 978-0-9557670-3-6 www.tomahawkpress.com

External links

• Official website