Hotel Chocolat secures £35m revolving credit facility

Premium chocolatier Hotel Chocolat said on Monday that it has boosted its banking facilities to help see it through the coronavirus crisis.

The company secured a new £35m revolving credit facility with Lloyds Bank, which replaces an existing £10m overdraft facility. This follows an equity placing in March, in which the group raised gross proceeds of £22m to fund growth capital investment and to provide operational headroom.

Hotel Chocolat noted that Easter is the second largest seasonal peak for the business and said the closure of its stores from 23 March has had a "material impact" on trading. "However, the group has been able to rapidly leverage its direct-to-consumer multi-channel model to redirect demand to online, and to modify the working methods of its distribution warehouse to operate safely, with a temporarily reduced product range," it said.

While this did not fully mitigate the total retail sales loss during the three-week Easter period, the company said it was "encouraged by the agility and resilience" of the business model and continues to explore further avenues for online growth.

Co-founder and chief executive officer Angus Thirlwell 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."

He said that every day at Easter, online demand exceeded the quantity of orders the company could accept, due to requirements to ensure safe working, combined with the short adjustment period.

"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," he said.