Darrell Lea plunges into administration and seeks buyer
The Directors of Darrell Lea Chocolate Shops and Ricci Remond Chocolate Company, collectively Darrell Lea, have appointed PPB Advisory as voluntary administrators of the business.
Mark Robinson of PPB Advisory said “We are undertaking an urgent review of the business with a view to preparing Darrell Lea for sale as a going concern.”
“The owners of the business have agreed to provide some short term financial support whilst we undertake this process.”
“We will work with all stakeholders including employees and their representatives, licensees, customers and suppliers to ensure the business continues to operate effectively.”
Company profile
Darrell Lea’s speciality chocolate and liquorice portfolio is sold in 69 franchise stores and 1,800 retail outlets across Australia, New Zealand and the USA.
The company employs around 700 people across its manufacturing base in Sydney and its retail network.
The firm’s total portfolio comprises over 350 products and it has an additional 150 seasonal lines for Easter, Christmas and other occasions.
Darrell Lea acquired Australian liquorice brand Ricci Remond in 1965. This business brings another 100 items to its product mix.
Darrell Lea manufactures most of its products from it factory in Kogarah, southern Sydney. It also outsources some production to other manufacturers.
The company ended a copyright dispute with local rival Cadbury in 2009 over the use of the colour purple on its packaging and advertising.
Standing in Australian market
Darrell Lea commands a 1.6% share of the US $4bn Australian confectionery market, according to data from Euromonitor International
The market, which is expected to grow around 5% this year, is led by Mars. Cadbury is next largest player, while local manufacturer Natural Confectionery holds third place.
Initial interest and ‘employment status’
In March this year, Darrell Lea complained that a large share Easter profits, which totalled almost $360m in 2010, was heading straight overseas and bypassing Australian businesses.
Reports circulating in the Australian media indicate that employees were not kept in the loop and were shocked by the decision to sell the company.
PPB Advisory has indicated that both Australian firms and international players have expressed an interest in buying Darrell Lea.
PPB Advisory and Darrell Lea will hold the first meetings with creditors on 20 July.
The administrators said that employees would be given an update on their “employment status “ by the end of this week after assessing the viability of current business operations.
