Does Davies have the golden ticket?
After a decidedly sticky year for the Midlands chocolate business, Thorntons has a new man at the top to the stir things up. Sam Metcalf finds out whether Mike Davies is the man to bring the taste of success back to the business.
It's a long way from Brazil to Alfreton you'd think, but Mike Davies probably hasn't noticed, although Rio de Janeiro might be easier to find from the train station than the Thorntons head office.
I'm here to meet the man who has been charged with restoring Thorntons to the top end of the confectionary market. Not that this is going to be easy after a rocky year in 2006 - a year that threw up declining sales, a failed takeover bid from ex-chairman Christopher Burnett (who promptly resigned) and the departure of chief executive Peter Burdon. And profits dropped by a whopping 36 per cent. Yes, 2006 really was Thorntons' annus horribilis.
Into the breech, then, stepped Mike Davies. Brazilian-born, globetrotting ex-managing director of the UK and Ireland, European vice president, sales and latterly president of Latin America at Mars Inc. Small wonder Davies is seen as something of a veteran in confectionary circles. Indeed, he had been out of the industry for 18 months before taking up the role of chief executive at Thorntons in October 2006.
Does anyone love chocolate that much? Of course they dox85
Before we sat down to talk, Davies posed for some photographs in the replica, working Thorntons shop, situated at one end of the staff canteen, and gave me a small tour of the Alfreton operation. It is an impressive site. Although the question keeps popping into my mind: why here?
Davies says: "The whole site was purpose-built and it's a great place for us to do business. We're close to the M1 and there are a multitude of opportunities for us to grow.
"Most importantly, we have the right people here to do a great job, from the shop floor to management level. We have a great heritage to protect and build on in Alfreton and we're very proud of that."
"The Thorntons brand has huge potential and a heritage that is well loved. There are enough people here who care enough about the brand and that's what made the role so appealing to me."
At 6ft 4ins, Davies cuts an imposing figure as he strides through the corridors at Thorntons. He is a man who obviously has the respect of his workforce - one he has seemingly come to know very well, from the canteen workers upwards, in a very short time.
As we climb the stairs to his office we pass two impressive portraits of the Thornton brothers, who set the company up in 1911. It is an imposing sign of the company's heritage. I ask Davies if he feels under any extra pressure to take Thorntons back to the top.
He replies: "Personally I see it as a challenge, not as any extra pressure. I'm really relishing and looking forward to the task of making Thorntons the premier name in chocolate.
"We've got plans in place to turnaround the company and we hope they'll come to fruition in three years at the most. We've got 367 self-owned stores and 214 franchised out and we want to improve the performance of both. I think we've got the right people in those shops to make sure our plan is successful."
But did a company going through such tumultuous times really appeal to a man who had been wrapped in the safe bosom of Mars for two decades? Clearly he had a job on his hands, whichever way one looks at it.
"The most important thing we had to do when I took over was have a good Christmas - that was the short-term goal and we achieved that goal, so I was happy," says Davies.
"I don't think it was a secret that the company had been subject to attempted buyouts and we needed to brush that aside and steady the ship, consolidate and build for the future. We have a clear goal: to build the business and increase shareholder value."
This is hardly anything new, of course - who would not say that was their long-term goal? In fact Davies sticks to a very prepared script throughout our meeting and I was told before I arrived in Alfreton that he really did not want to talk about himself at all; this was all to be about the brand, the company, Thorntons.
Maybe I am being harsh. Maybe Davies is self-effacing and does not want to distract from the whole "chocolate heaven since 1911" schtick. But it is not hard to see why he's seen as a safe pair of hands.
In the past Thorntons was seen as the last word in chocolate luxury. Nowadays a trip to the supermarket throws up a confusing array of premium brand merchandise. Davies identifies this as one of the most challenging areas for Thorntons.
He says: "We have to understand that there has been massive growth in the premium end of the market over the last ten years. Also, during that time people have become more health conscious - they're eating dark chocolate more, for example. We need to move with them. And we need to make sure that we put the customer at the centre of any growth plans."
This is a central theme to our conversation: to put the customer first. Davies concedes that over the last year Thorntons has neglected to do this. Boardroom struggles have a tendency to make management take its eyes off the ball and why should Thorntons be any different?
Davies obviously cares about people, because this is one of the few times throughout the interview that he becomes animated and passionate. But all the passion in the world is going to be needed if Thorntons is to catch up with brands such as Green & Blacks and Lindt.
Responding to this Davies again asserts that the customer should be put at the centre of the future success of the company.
He says: "To compete in this day and age I think we need to refocus the business with the customer in mind.
This kind of ethos was lost during the attempted purchase in 2006. The company must look forward. I was involved in two or three company turnarounds while I was at Mars and I don't see why I can't do the same here."
A look around Thorntons' in-house shop reveals that the company uses a lot of packaging. And that is an understatement. Of course chocolates, on their own, are never going to look that fantastic and the ornate packaging is part of the sales technique.
But how does this square with greener working practices, recycling and sustainability - all buzzwords for the modern business?
Davies says: "Of course we realise that our carbon footprint is important and we're taking steps to reduce it, such as cutting back on the mileage of our delivery fleet. But we realise that more can be done," says Davies.
"We also realise that some of our competitors display the Fairtrade logo and that's something we're looking towards, to try and establish better links with the people who actually grow the cocoa. All these things are very important trends that we need to keep close tabs on if we're going to continue to be successful."
Davies' influence has already been felt at Thorntons. Second quarter figures released in January 2007 showed that the corner has been turned. Turnover of £3111m was roughly the same as the same time a year before and the dramatic dip in performance in summer 2006 has been, if not forgotten, then at least made good. The company now has its own highly successful online service, which also bodes well for the future.
Continued investment in high street stores will strengthen brand awareness and, with Davies at the helm, it seems that Thorntons may well be in for a period of success.
Davies certainly thinks so.
He says: "There's a great future for this business - I'm convinced," he says. "It's our centenary in four years. That really will be an exciting time, we're all looking forward to it and by that time I fully expect us to be back at the top of the pile again. We're pleased to be in Alfreton. This is where we belong and this is where we're staying."
