Second half Retail sales last year were £44.2million, these are likely to decline because of the ongoing trend and also by store closures so that could mean a further decline of say £4million. GM on retail possibly 55% so this equals a further £2.2million reduction in year end profit. This situation could be improved though by further increases in Commercial Sales, that is a double edged sword though as they contribute to decreasing Gross Margin and further depression of Retail Sales.

Then of course there is also the continuing decline in Gross Margin.

All in all I can’t see that the directors optimistic statement made at the time of the profit warning could come about.

I continue to be dismayed by the trend towards becoming more and more a Commercial Sales business and allowing the Retail business to be a ‘shop window for the brand.’  I cannot see that there is a future for the business in this direction. I think that a massive effort needs to be made to restore the Retail business to its prime position as the main sales channel for the company. Since the start of the like for like decline in sales in Retail in 2004 in current value terms this is at least 20%, much or more of this could be recovered. The speed of improvement in the Retail Offer is nowhere near fast enough.

Let’s hope that the new NED (presumably Chairman designate) will help to push the company in the right direction. I again offered my help last year as an NED and once again my offer was rejected.

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If this forecast can be made already then presumably that means that such a reduction in profit is already known about. This suggests to me that the like for like downtrend in Retail sales indicated by the first quarter results of 7.8% has, not surprisingly continued and that increases in gross contribution from Commercial Sales have failed to make up for it.

I regret to say that the continual reduction in the companies performance is due to the fact that the business operates an ‘Authoritarian Culture’.  Very regrettably this type of culture is now the norm in our corporate companies sector and in many of our state run organisations. It is a culture that works on a ‘command and control’ basis and denies the use of individual creativity. It has been known for nearly 100 years that this sort of culture in not effective so it is a total mystery to me that it seems to be generally accepted, actually lauded and increasingly used.

In Thorntons days as a very successful private family company the culture was the opposite, a ‘Participative Culture’. Everybody was respected from top to bottom, everybody’s personal creativity was appreciated and utilised, all respected each other. Within a few years of the public issue its style had changed to Authoritarian and so it has continued ever since.

Thorntons remains a great company with great products and people but until the restriction of the authoritarian culture and the resultant authoritarian management style is removed the companies decline will continue. As we have witnessed in the Middle East this year it takes a revolution to remove the authoritarian dictator culture so it does also with a company.

The authoritarian culture is normally defensive, criticism is rejected. It is not surprising that all my efforts to advise the company in the last two and a half years have been rejected.

I studied the business very carefully again at the time that I published my book and recognised that it was in long term decline and the reasons that this was happening. By this time all family members had left the business so that it did seem that it might again be possible to help the company recover and make the best of its potential. Since that time, two and a half years ago I have offered my services several times to the company but the offer has always been rejected.

Eventually, knowing that the present chairman had announced that he would soon resign I applied for the role myself.  This was just because I wanted to help and  not because I wanted the status or rewards of the role or because of what happened in the past. My disappointment therefore is for the company and not for myself. I made my application public, knowing that it would very likely fail and that public failure would not be a public disgrace.  All I could offer was very long term experience, insight, knowledge, vision, already worked out ideas, understanding of the workforce, motivation and willingness to work many more than the remunerated hours. I could not offer much City experience and I am not a young or even middle aged man.

I heard the news during December 2011 that I had not been successful and understand that the non-executive directors have made this decision, I don’t know what part the shareholders have played.

I have proved publically that I am prepared to back up my words with action and I remain prepared to do that.

Peter Thornton

9th December 2011

It is a ‘national treasure’, its products have given pleasure to millions of people and thousands have enjoyed the rewarding experience of working in the business.

The business has been declining in performance for quite a few years now, I want to see it survive, prosper, expand and become a world-wide force.

The current Chairman Mr. John von Spreckelsen is resigning and a search is on for a new Chairman. I believe that it again needs family leadership and I can provide it. I have long term intuitive knowledge and experience, I worked in every part of the business and managed every part of it. I know what needs to be done to put it right, I have a Vision as to what its future should be.

15^th February 2012

Thorntons has reached its centenary. In those 100 years our products have given pleasure to millions, and thousands have enjoyed and do enjoy working for the company. It has become established as one of Britain’s best-known confectionery brands and an important name on the high street – a true national treasure.

My desire is that Thorntons should remain British and become an even stronger brand as we enter our second hundred years.  I have a Vision incorporating ideas and insights that take the renewed and revised ‘Thorntons Business Formula’ forward to ensure the company’s success. This formula has helped the company survive through two world wars, the Great Depression and numerous economic recessions, and is still the right and valid foundation for the company today.

What will the company be like in its second century? Customers will be attracted into the shop by traditional window displays, like a jewellers shop window with the same excitement and variety.  There will be the added attraction in the window of the display of unwrapped confectionery tempting the senses just as an excellent bakery shop does. Outstanding design will be a major element of the business concept embracing the confectionery itself, all packaging and the retail environment.

Inside the shops, franchises and cafes, we will offer the customer an enjoyable and satisfying emotional experience, where the staff are welcoming and involve and inform their customers.  The staff will know their customers personally, as customers will make regular and frequent visits and a friendly atmosphere will be actively encouraged. In order to achieve this, our shop staff must be excited about our products and value themselves as being part of the Thorntons’ family.

There will be a wide range of unwrapped products beautifully but hygienically exposed for a new style of personal selection. The existing Continental range will be expanded and innovations frequently introduced, regional and international in style. Traditional products such as boiled sweets will be temptingly displayed. Thornton’s famous toffee will be strongly featured, broken into pieces in the back of the shop and displayed in protected open trays for customer self-selection.  The chocolate assortment gift ranges will be in transparent lidded boxes so that the customers can see exactly what they are getting and be tempted by the contents.  And because of the fresh displays, the wonderful aroma of chocolate will permeate the air.

The children will have their own special Thorntons branded confectionery products to cover the whole range of their desires (being friendly to their teeth and health of course). Thorntons will capture their imagination, tempt their senses and importantly secure their brand loyalty for the future.

In the cafes and larger Thorntons’ shops there will be a much wider product range, making wonderful use of the available space. The shops will be spotlessly clean, renovated, redecorated, with a hint of their historic foundation. The cafes offer a particular opportunity of developing the utilisation of the brand into closely related products, offering a stylish and relaxing ambience.

The retail shops will be where the brand quality is nurtured through in-store efforts to emphasise the heritage, tradition, longevity, and English nature of the business.  Retail always has been and will be the flagship presentation of the brand.

Market positioning will be critical, with our prices just above middle market but our product quality above this, giving our customers a real sense of value. Effective mouth-watering product advertising with a strong emphasis on the heritage of the business will be essential to convey our position in the market. The Thorntons brand has traditionally implied quality, value, freshness, honesty, reliability and delicious products. This brand legacy will be protected and extended. It has great integrity and customers must never be let down by Thorntons.

This means that the Thorntons will be open and honest in all its dealings with stakeholders – the brand implication will extend throughout the company and beyond. Our customers will always get better than they expect. Our employees will always be treated with respect and as equals and will be encouraged to contribute ideas to the company. Our employees will share in the company’s success through profit sharing schemes and as it becomes feasible, a shareholding trust for the employees will be set up along with representation at board level. Long term relationships will be built with our suppliers. Environmental issues will be high on our agenda and ethical sources of supply will be developed.  I can see the possibility of co-operative manufacturing of chocolate and other materials in source countries, thus helping those countries. Sound ethics will be the foundation of the company culture.

Thorntons will establish its own training centre which will include an apprenticeship scheme in all the skills necessary for confectionery production, research, development, retail sales and management. Short courses in confectionary skills will be available on a profit-making basis to customers. A Thorntons Visitors Centre at Thornton Park would also be significant potential source of income, incorporating a confectionery museum and factory tours.

We will develop and create very high quality hand made products for special events for our customers such as weddings, birthdays, christenings etc.

Internet Sales will be a very important part of what we offer and will be very closely integrated with the retail operation; people may make a choice on line and collect in the shop, for instance. The internet site will be entertaining, aesthetically pleasing and easily navigated. Many internet services such as customised boxes will be introduced into the retail shops.

Own Label sales to a few high quality retailers such as Marks and Spencer are part of my Vision; the products will be of equally high quality as in the company owned retail stores, but under the retailers brand name. Because of the different brand name, the products will offer no competition to Thornton’s retail, allowing our retail shops to be the flagships of our company and our brand.

The franchises will continue to fulfil their role of providing specialist outlets in those shopping centres which are too small to accommodate a Thorntons-owned retail shop. All the qualities of our retail style will be present in the franchise outlets.

In the longer term I see Thorntons as an international brand; retail shops will be opened in specifically suitable markets where the local competition, acceptability of foreign brands, disposable income, laws and regulations, transportation and cultural tastes in confectionery make this possible. The world will be consuming and enjoying first class confectionery made in Derbyshire.  And the products will be of a high quality that will successfully compete in the world marketplace.

Above all, success depends upon a highly motivated and involved workforce. Effective leadership of the people who work for the company will allow them to achieve their potential and make more valuable contributions. Consultation will become the house management style. Respect will work both ways, creativity will be assumed right through the system, and the people on the shop floor in the factory and in the shops will be valued as our most important assets.  There will be on-going employee development, employee internet forums and focus groups.

An Employee Shareholding Trust will be established to hold at least 20% of the shares on behalf of the employees. Institutions will be established within the company to ensure that this level of shareholding is properly represented. Steps will be taken to adopt the principles of the Relational Business Charter.

I believe that my Vision will effectively secure the future success of Thorntons and provide a very good return for shareholders.  This is why I am applying for the Chair of the company. The Chairman doesn’t manage the company on a day-to-day basis.  But the Chairman’s Vision is critical, providing direction to company and ensuring the maintenance of its values and ethics.   My lifetime of experience with the business provides me with distinctly profound instinctive understanding of what Thorntons must be about. Having been in the role of chairman previously provides me with a unique depth of knowledge, and a passion that would be unlikely to found elsewhere. Along with the shareholders and the workforce, I wish to lead Thorntons forward into the company’s second century.

My name is over the door and I would like this to be a personal guarantee to all Thorntons’ stakeholders that with the right Vision, Thorntons will be stronger than ever.

2012©Peter Thornton

In my book ‘Thorntons, My Life in the Family Business’ I said that at that time of the start of the Thorntons business in 1911 its founder, my grandfather Joseph William Thornton was living with his family in the countryside.

This was my recollection of what I was told by my father and backed up by various documents in my possession.  However I have now found this story to be incorrect due to some assistance from one of my readers.

This reader, Mr Alan Everatt, had been researching his own family history; he had discovered that his forebears lived on Edgar Street in Pitsmoor in Sheffield in the 1920s and that the family that had lived there previously to them was the family of Joseph Thornton, my great grandfather.  Edgar Street was a place of closely packed two up and two down houses, a place where railway workers lived.

Alan followed his research through and found that by 1911 my grandfather was now living in a very nice rented semi-detached Victorian house in a good quality residential area called Norfolk Park.

My publisher, Bruce Sachs of Tomahawk Press contacted the Hallamshire Historical Buildings Society and together with Mr Tony Goff of the Society made contact with the current owners and subsequently we visited the house.  We were delighted to find a house in excellent condition and furnished in a Victorian style.  It was a very moving experience for me to move around in the home where once my grandfather, whom I never knew, lived with his family particularly my father William Norman and Uncle Joseph Stanley who were both very instrumental in starting and building the family business.

Since that time the city of Sheffield became very interested in the property and agreed to place a blue plaque on the building commemorating the fact that Joseph William and his family had lived there in 1911 when they started the business.

This unveiling took place at the property, 64 Fitzwalter Road, Norfolk Park on the 17th of September 2011.  It was carried out by Councillor Dr Sylvia Dunkley, Lord Mayor of Sheffield at 1.00 pm. The occasion also commemorated the centenary of Thorntons and was followed by a free talk by me on The Thornton family in Sheffield at The Norfolk Park Heritage Centre. For this talk I carried out much research into the earlier history of the family. An abbreviated version of this history will appear on this website soon.

Yes, the shareholders may have benefited but has the country benefited? Have the employees benefited? Far too many famous old British companies and British brands have ended up this way once they have got into the maws of the City.

The very fact that the government should take this action indicates how little they understand about the way in which successful companies work, that they cannot be treated like commodities to be bought and sold without any regard to the people who work within them or to the value of the brand to our country.

It’s about time that we had a government that recognizes the importance of really helping business particularly those with a value which is far greater than their market capitalisation.

Knighting the individual who oversaw the final funeral of a famous British company is an insult to all those people; family and employees who built this highly successful business over a period of over 200 years.

A sea-change is needed in the perception of how successful business works in this country, separating ownership from management generally allows the shareholders and workers to be ignored in spite of the ineffectual ‘governance codes’ with the result that the people who really matter and who are over-rewarded are the directors. The shocking degree of over-payment of top people is not just confined to the banks but is also rife in big public companies.

The Family Business Sector is much more profitable than the Public Company Sector and the sooner the government realises this and stops pandering to the big City Directors the better off the country will be.