Hotel Chocolat boss calls on landlords to change ‘adversarial’ rents system

Angus Thirlwell says the fixed rent system is ‘feudal’ and needs to adapt to rents based on a proportion of sales instead.

A Hotel Chocolat store
A Hotel Chocolat store

Retail landlords should move away from “adversarial” rent systems and adapt to rents based on sales to form stronger partnerships with retailers, according to the boss of Hotel Chocolat.

Angus Thirlwell told the PA news agency that he has been opening new sites in Japan with huge success thanks to the model used there where revenues are shared.

On revenue-based rents, he said: “I think it’s a good model because everyone has an aligned interest and it isn’t a zero-sum game.

Hotel Chocolat boss Angus Thirlwell drinking hot chocolate
Hotel Chocolat boss Angus Thirlwell has called on landlords to turn to revenues-based rents. (BBC / PA)

“It’s a partnership and I love partnerships. In Japan shopping malls have been thriving, whereas in America it’s been deteriorating because it’s an adversarial relationship. It’s almost feudal and has been going on for far too long.

“I would welcome a more balanced partnership approach and we’ve seen the revenue share approach in Japan working well.”

Mr Thirlwell added that once lockdown has lifted, he hopes to continue opening high street stores, explaining that the sites provide a helpful boost to online sales.

He explained: “We still like physical retail a lot. The ability to recruit new customers through physical spaces is just so powerful when you can showroom what you’ve got in a very effective way.

“We’ll make some adjustments in the type of locations that become viable for us based on the market adjustments to rents and we have seen a new breath of life in local high street areas.

“People with good jobs have more time and from working at home they are exploring their local areas.”

His comments come as the retailer and online chocolate business saw a 19% surge in sales in the 13 weeks to December 27, despite the vast majority of Hotel Chocolat’s 125 UK high street stores being closed.

In the six months to December 27 total sales rose 11% compared with the same period a year ago.

Households have been turning to luxury treats and booze during the pandemic, with Hotel Chocolat revealing sales of its chocolate vodka drinks selling particularly well, alongside its ice creams and vegan chocolate, which uses hazelnut milk instead of dairy.

The retailer doubled the size of its distribution centre and employed a series of new online specialists to ensure online services could cope with the increased demand in sales.

It also stocked up on key ingredients, especially Italian hazelnuts, to avoid the problems that have become apparent at ports and borders at the end of 2020.

In the US, sales were also strong in the 13 weeks to December 27, up 19%, and in the six months to December 27 they rose 8%.

In Japan, 12 stores were opened during the six-month period, increasing its store count there to 18.

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