Leonidas to close one in ten stores?

Belgian praline producer Leonidas is suffering from the effects of the Covid-19 crisis. Its sales largely depend on tourists, and they will not be returning anytime soon. Up to one in ten stores may have to be closed, its CEO says.

Tourists stay away

The Greek-Belgian chocolate producer has 1300 stores worldwide, 400 of which are in Belgium. Those in touristic areas and at airports are still having a hard time: “In some stores, we are still selling 80 % less than usual”, CEO Philippe de Selliers told Belgian newspaper De Tijd. In Bruges, some stores were temporarily closed. “Travel retail is dead, and sales can be up to 90 % lower than normal.”

Furthermore, due to the high rental prices, the stores at the airport are precisely the most expensive to the praline company. If tourism does not recover soon, dozens of branches may have to close, according to de Selliers.

E-commerce

For the current financial year, which ends in June, the CEO counts on a 20 % drop in turnover. Thanks to the chain’s stores in non-tourist towns and cities, the damage is not as bad as expected. “We are counting on 80 million euros in sales this year and, like last year, we will be profitable. Although last year we missed out on approximately 8 million euros in gross operating profit (EBITDA).”

As the Covid-19 crisis broke out a year ago, Leonidas lost 80 to 90 % of its turnover. The company made a donation of five million Easter eggs to hospitals, but also had to destroy a large quantity of chocolate.

In the second lockdown, the damage was not as bad: the company’s turnover fell by about a third. Leonidas is now better prepared, and the second lockdown is less strict, the CEO explains. Also, e-commerce has grown to represent almost 2 % of total turnover. “In five years, that should be 5 %. We will probably never reach 30 % though, as most people want to see and smell the pralines.”