In a significant move in the confectionery industry, the founders of Hotel Chocolat, Angus Thirlwell and Peter Harris, are set to receive £144 million each following the sale of the renowned British chocolatier to American giant Mars. The deal, valued at £534 million, was initiated by the duo who established Hotel Chocolat in 1993.

Hotel Chocolat anticipates this acquisition will catalyze its growth, particularly in international markets. The company, predominantly UK-based with around 124 shops, has faced challenges in its overseas expansion, including the closure of its five U.S. stores last year. Thirlwell, the CEO, cited supply chain difficulties as a barrier to global success.

Thirlwell, who retains his role as CEO post-acquisition, plans to reinvest 80% of his earnings from the sale back into the business. Harris, on the other hand, will retire but also plans to reinvest a portion of his proceeds in the company under Mars' ownership, though the exact amount remains undisclosed.

Hotel Chocolat, known for its upscale confectionery, started with online sales and opened its first physical store in North London in 2004. Regarding potential changes post-acquisition, Andrew Clarke, Mars' Global President of Snacking, assured that there are no plans to alter Hotel Chocolat's recipes, emphasizing Mars' track record of nurturing and protecting the brands it acquires.

Hotel Chocolat's international ventures have been complex and costly. Besides the U.S. market withdrawal, which cost £3.5 million, the company also faced setbacks in Japan. Their initial partnership with Chris Horobin, former head of QVC Japan, ended with a write-off of nearly £22 million. However, a new joint venture with Tokyo's Eat Creator Corporation aims to establish 21 Hotel Chocolat stores in Japan, with Hotel Chocolat holding a 20% stake and receiving royalties.

Thirlwell spoke candidly about the challenges of international brand building, noting the operational complexities involved in manufacturing, distribution, and other behind-the-scenes aspects. He expressed confidence that the partnership with Mars would effectively address these issues.

In addition to its retail operations, Hotel Chocolat owns a 140-acre organic cacao farm and the Rabot Hotel in St Lucia. The company recently reported impairment charges on the estate due to reduced visitor numbers amid ongoing COVID-19 disruptions. Hotel Chocolat also maintains a presence in Ireland and Gibraltar.

Source: https://www.bbc.co.uk/news/business-67436228