Tea and coffee specialist Whittard of Chelsea suffered a plunge in profitability last year as it spent heavily on re-positioning the brand.

The 130-year-old tea saw EBITDA for the year to 27 December sink to £154k from just under £2m in 2013, according to newly filed accounts at Companies House.

The previous year’s £253k stator profit has dropped to a £1.4m loss on turnover down 1.5% to £28.6m as the firm shuttered stores, though like for like sales grew by 3.7%.

The company attributed the pre-tax loss to a reduction in the number of UK trading outlets and what MD Mark Dunhill said was significant investment in terms of people and marketing to provide the business with a platform to effect its transformation from “a high-street value retailer to a global aspirational brand”.

Repositioning work included new branded guidelines, new retail store format designs, brand communication and new packaging concepts.

Dunhill said: “I joined the company to conceive of and implement a five-year vision to reposition the brand. The focus is on delivering that vision. Brand repositioning involves, when you’re moving as we are, from being a high-street value retailer to a global aspirational brand, that requires investment in the brand and so I’ve brought in significant investment in terms of people and marketing to provide the business with the platform to effect this transformation.”

He said the natural consequence of that was a deflation in profits last year “as we got our house in order and we are making significant progress in that repositioning.”

Whittard now had 51 stores after closing seven last year and opening three in Canary Wharf, Oxford Street and Southampton West Quay.

It opened its first Teabar concept in one of its Regent Street stores, in the West End of London last year, which offers tea and coffee to consumers on the premises.

A test concept kiosk was opened in Union Square, Aberdeen, offering a teabar/store in a small footprint that also offers cakes and pastries with what managing director Mark Dunhill, said could form the basis of a blueprint to take overseas.

So far in 2015 it has opened in Birmingham and Aberdeen this year and refitted eight outlets across its estate including completely revamping its showcase store in Covent Garden Market which now reflected the group’s new brand positioning, Dunhill said.

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