Andrew Schuman thinks it’s a pretty sweet deal.
The owner of Hammond’s Candies, an Adams County manufacturer offering free tours that’s been around for a century, sold it this week to the locally based retail chain Lolli & Pops. Both sides declined to disclose the terms of the deal.
“We thought this was the best fit because it addresses the retail component of our business,” Schuman said. “And we are primed and set up perfectly to feed into the Lolli & Pops locations all over the country.”
Schuman, who had owned the business since 2007, is staying on as president and CEO.
“Our plan is to integrate but not terminate,” he said. “I think there’s room for both.”
“I just think the synergies, the people over there and us fit very well,” said Keri Morris, CEO of Lolli & Pops. “We’ll just kind of extend the family.”
Lolli & Pops has some 60 stores around the country, including in the Cherry Creek and Park Meadows malls. But the company has outsourced its production, unlike Hammond’s, which has focused on wholesale distribution and can be found, according to Schuman, in over 20,000 stores.
Having Hammond’s 35,000-square-foot facility at 5735 Washington St. will allow Lolli & Pops to manufacture for the first time.
“It really allows for stability in the finance sector,” Morris said. “When we peak as a retailer, it’s a low point for wholesale. This allows a streamlined, steady flow for us.”
Schuman said nothing will functionally change for his customers. Hammond’s will still have free tours of its factory and continue to make classics like chocolate-filled peppermint straws – his personal favorite. He’ll keep expanding its chocolate bar line, which includes flavors like Espresso Martini.
“Their supply chain is a tad disjointed,” Schuman said. “And over the next 12 to 18 months, we can fold that into our warehouse and our logistics and then feed product into their stores much easier and hopefully with less cost.”
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Schuman, originally from Washington. D.C., owned 62 franchise camera stores across D.C., Maryland and Virginia before buying Hammond’s. So he knew what retailers were looking for in wholesalers.
“I was my customers for 20 years,” he said.
He bounced over to the candy business, he said, as the digital camera started becoming more popular. He was the second person not named Hammonds to own the company.
At that time, he said, it was viewed more as a seasonal Christmas candy operation. But during the past 18 years, the company grew 10-fold, acquiring two other sweet businesses along the way. Its products can now be found everywhere from mom-and-pop shops to Costco. The company has 150 employees.
“I think the business was really poised and ready to go,” he said. “The previous ownership did a good job setting up the wholesale business.”
Despite the success, though, he wanted to sell. He has seven family and friend investors that he didn’t want to make commit for another six or seven years, he said. He began fielding offers in early 2023.
“We got to an inflection point where if we’re gonna go to the next level, I think the thing to do would be to take my investors out, refinance the debt through a buyer with another bank and have a partner that has the access to capital that I really wasn’t willing to take on for my investors,” Schulman said.
In June of last year, he decided Lolli & Pops and its parent company, Los Angeles-based TerraMar Capital, was the right fit. After TerraMar acquired Lolli & Pops in 2019, it has been looking to add vertical manufacturing and warehousing companies to the fold, Morris said.
She also came on as CEO in 2019, taking over a company on the tails of a Chapter 11 bankruptcy. After 11 years as an executive for Sephora, she led Lolli & Pops to profitability within 18 months by launching e-commerce and revamping its retail stores.
In 2020, the former Bay Area company relocated its headquarters to Denver. Because of the pandemic, it couldn’t open its office in Cherry Creek until 2022. The company had 550 employees before the acquisition.
Morris said she hopes to add three to five more Colorado stores in the future. She also expects to acquire other companies within two or three years.
“My dream would be a chocolatier and a gummy manufacturer,” she said.
Schulman sees Lolli & Pops in the same position as Hammond’s was 14 years ago, with a strong foundation for wholesale.
He has several reasons for staying, he said. He wants to walk his buyer through the complexities of redoing its supply chain. He and his wife, Lori, also put their own money into the deal, so they have a vested interest. And Schuman wants to savor the relationships he’s built throughout his time with Hammond’s.
“When you’ve been in business for 18 years and many of the workforce have been there longer than you, you want to see that through,” he said.
He actually knew Morris from years before, when their kids went to middle school together. A decade later, they have eyes on a PayDay.
“We’re excited about doubling growth,” Morris said.
“I think we can grow another 10-fold,” Schuman added.
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