Russell Stover announces major restructure as parent company Lindt reports slow growth in the US

By Anthony Myers

- Last updated on GMT

Pic: Mike Fitzpatrick/Flickr
Pic: Mike Fitzpatrick/Flickr

Related tags Russell stover Lindt & sprüngli financial report

Russell Stover Chocolates has announced it is making several changes to its production, retail and distribution networks across North America.

The Kansas City, Missouri-based company, bought by Lindt & Sprüngli in 2014, said in a press statement the changes “follow a strong fiscal year (2019) and its production and distribution networks will add approximately 300 jobs across its facilities in Corsicana, Texas, and Abilene and Iola, Kansas​.”

This will occur in conjunction with the closing of the Montrose, CO, location in the spring of 2021, accompanied by closures of select low-traffic retail stores over the next year.

Having been in business since 1923, we know the importance of keeping pace with the changing tastes and preferences of the people who buy our chocolates​,” said Andy Deister, Russell Stover CEO. “Just as consumers change their preferred flavor or package, they’re changing the way they shop for our products, and we’re making sure we have the infrastructure to deliver on their expectations.”

The consolidation process with the Lindt & Sprüngli North American (LSNA) logistics operation, which began in 2018, will continue as scheduled, confirmed the company in its statement.

Parent company Lindt announced earlier this month it was slashing its North American merchandising team​ with 300 losses across its brands including Russell Stover, Lindt and Ghirardelli.

The result of latest consolidation will be the closure of the Cookeville, TN, and Butler, MO, distribution and fulfillment centers later this year, and the transfer of the Cookeville Fulfillment Center to the Russell Stover Plant in Corsicana, TX.

The company said that, in total, there will be approximately 400 positions affected by these changes across the country, a number that will be substantially offset by planned additions of approximately 300 positions at the expanded facilities in Kansas and Texas.

During this transition, we are committed to providing employee support, including giving significant advance notice of all facility closures, offering additional opportunities within Russell Stover, as well as providing severance, continued health care coverage and other benefits for those working through the close date​,” the company said in its statement.  

Lindt & Sprüngli report increase in organic sales

Lindt & Sprüngli reported a 6.1% increase in organic sales for 2019 and confirmed it wants to grow 5-7% in the long term, helped by strong growth in Europe and the opening of new Lindt stores.

Group sales rose to CHF4.51bn ($4.68bn) in 2019.

Growth in North America was 5.4%, a slowdown versus the first half of the year, with Lindt pointing to substantial price pressures in a changing retail landscape, it said in its sales report.

"The market environment continues to be very challenging​," the company based in Kilchberg on Lake Zurich said in a statement, adding it had gained market share in all important countries.

In the US, it said that, despite the “changing retail landscape, characterized by substantial price pressure, all three brands — Lindt, Ghirardelli and Russell Stover — contributed equally​.”

Organic sales, which strip out currency swings and acquisitions, were up 6.2% in its biggest market, Europe, thanks notably to Germany, Austria and the United Kingdom, despite Brexit worries.

Chocolate makers are grappling with sluggish demand as many consumers prefer healthier snacks, but Lindt has so far bucked the trend, thanks to upmarket products like Lindor chocolate balls or pink grapefruit-flavored dark chocolate that people buy as a special treat, Reuters reported.

The company added its financial statement would be impacted by restructuring costs of about $62m in its logistics, production and retail network, as well as in merchandising, in the US.

Related topics Manufacturers Candy Lindt & Sprungli

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