Laura Secord is back in Canadian hands.
The classic chocolatier, named for War of 1812 heroine who warned British forces of the advancing Americans, has been sold to Aliments NutriArt Inc., an affiliate of Quebec-based Biscuits Leclerc Ltee, for $19.5-million, said sources familiar with the transaction.
The bargain price was struck after the struggling 130-store chain was initially asking prospective buyers for up to $30-million after putting itself up for sale last summer.
Chief executive Bryan Crittenden is expected to depart the business tomorrow. Calls to Laura Secord were not returned, but the office of Jean Leclerc, a former Quebec politician who is chief executive of NutriArt, confirmed last night that a company announcement related to Laura Secord was imminent.
The move comes after the most recent owners, including U.S.-based private-equity investment groups Gordon Brothers Group LLC and EG Capital Group, tried to slash costs at Laura Secord by closing 30 underperforming outlets and revitalize the storied brand’s former lustre with new packaging, some individually wrapped single-serving treats, and a more modern look at its stores in 2005. The investment firms bought Laura Secord in 2004 for $27.6-million after prior owner, Chicago-based Archibald Candy Corp., sought creditor protection.
Still, the brand was viewed as "grandma’s chocolate" by many consumers, and Mr. Crittenden admitted last summer the company was trying to update its image in an effort to appeal to younger consumers, many of whom patronized the mall locations for ice cream cones.
While Laura Secord’s sales climbed to about $60-million last year, profit was down, sources said. Of that business, $40-million in sales came from the company’s retail stores and $20-million from sales at 2,500 food, drug and mass merchants across Canada.
On the plus side, the Laura Secord brand boasts a high level of recognition among consumers, with close to 80% unaided awareness. The first outlet opened in Toronto in 1913 and the chain was the premiere retailer of chocolate in the country during the 1950s and 1960s.
"But it’s a tough business [at retail], because they are on the shelf with seven to eight other brands," said one prospective buyer who had looked at the company. Many retailers, such as Shoppers Drug Mart and Loblaw Cos., sell exclusive house brands of premium chocolate, as well as newer organic varieties such as Camino Cocoa.
Competition has also been fierce from mass-market rivals such as Cadbury, which has added more premium offerings to its lineup, and from the expanding Purdy’s Chocolates of Vancouver, the country’s second-largest retail chocolate chain behind Laura Secord, with 55 stores in B.C., Alberta and Ontario. High-end European brands such as Godiva have also come to represent premium chocolate to consumers, while Laura Secord now occupies a middle ground between up market and mass market.
Mr. Crittenden, former vice-president of the international division at Hershey Co., was hired by Laura Secord’s owners in 2008 to revitalize the business.
He launched test market concepts such as selling coffee at selected locations, noting many consumers would buy chocolate and other confections at coffee chains Second Cup and Starbucks. Prior to the sale, the company was approaching specialty coffee retailers about forming strategic partnerships.
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