Chill Brands Successfully Undergoes ‘Significant Transformation’ in Structure and Focus

Chill Brands Group plc (LSE: CHLL) has completed a significant transformation, transitioning from an own-brand operator to a diversified distribution and services group, marking a period of strong operational progress and strategic realignment.

The company is now focused on forging partnerships with global and emerging brands within the fast-moving consumer goods (FMCG) sector, particularly in the burgeoning nicotine alternatives market.

The strategic shift includes the completion of the transition to a diversified, cash-generating distribution and services group, and streamlining costs by closing non-performing US operations, eliminating approximately US $650,000 in annual expenses.

Chill Brands has secured agreements with RELX and other leading global nicotine brands to provide UK nationwide sales and distribution services, further solidifying its new direction.

The company is partnering with SYP Global for novel nicotine delivery technology development. Chill Brands has established a warehousing and fulfillment center to reduce costs and increase operational flexibility.

A key initiative is the upcoming launch of Chill Connect, an online wholesale platform designed to enable independent retailers to order directly for delivery, streamlining their supply chain.

Chill Brands intends to create a trade compliance division, aimed at assisting brand partners in maximizing retail performance and promotional value.

Refinements are ongoing at the Chill.com marketplace, emphasizing stress prevention, reduction, and relief products. There is increased investment in paid advertising and multi-channel marketing to drive traffic and sales growth.

Key Financial & Strategic Highlights:

• Revenue Model: Combining recurring service fees from consulting and field sales representation contracts with repeat distribution income from product sales.
• Cost Reduction: Elimination of US operations is expected to improve profitability.
• Market Expansion: Focus on the high-growth nicotine alternatives market provides significant revenue opportunities.

Callum Sommerton, Chief Executive Officer of Chill Brands, stated, “Chill Brands today is a very different company to the one it was at the start of 2024. We have evolved into a diversified distribution and services business with multiple routes to market, supported by new infrastructure and a sharper consumer proposition on Chill.com.”