Stephany’s Chocolates, the candymaker that traces its Colorado roots back to 1963 and went bankrupt in May, will be taken over by Russell Stover Candies.
And while its five metro-area stores may not reopen, the Stephany’s brand may stay alive.
First National Bank of Colorado – which controls Stephany’s key assets, such as its trade name, candymaking equipment and inventory – has agreed to sell its stake to Russell Stover, said Gary Ashley, the bank’s executive vice president.
The sale could be derailed if a higher bidder steps forward today and has the funds available immediately, which is unlikely, Ashley said.
If not, the bank will foreclose and sell Stephany’s assets to Russell Stover, Ashley said.
Ashley, who wouldn’t disclose terms of the sale, said First National is getting “significantly less” than the roughly $1.4 million that the bank is owed.
Russell Stover, based in Kansas City, Mo., declined to comment Thursday, pending today’s activity.
However, Russell Stover is not interested in renewing the leases on five metro Denver retail stores that Stephany’s operated before it shut down in April, said Russell Stover co-president Scott Ward.
Those stores – now closed – were in Arvada, Park Meadows, Cherry Creek Shopping Center, Denver International Airport and Twin Peaks Mall in Longmont.
Continuing the Stephany’s brand is an option.
“They have two great names and a great brand name in Stephany’s and the Denver Mint and the Colorado Almond Toffee,” said Ward.
When Russell Stover acquired two other well-known candy companies in the 1990s, it incorporated those brands into its product line. In 1993, Russell Stover bought Whitman’s Chocolates for $13.5 million. In 1999, Russell Stover bought Pangburn Candy Co. for $4.5 million.
Arvada-based Stephany’s shut down abruptly in April shortly after the death of co-owner and president Hal Strottman. Employees weren’t paid for their final two weeks of work. Three unsecured creditors, including two former employees, initiated a Chapter 7 bankruptcy filing for Stephany’s in May. About a half dozen other creditors have joined the case.
A creditors meeting has been scheduled for June 30. The city and county of Denver has asked for permission to sell assets left at Stephany’s stores in Denver to recover $8,000 in taxes.
Privately held Russell Stover, which had revenue of $450 million in 2005, is the largest maker of boxed chocolates in the country. It has 60 retail stores nationwide and employs 4,500.
Russell Stover’s operations in Colorado include five retail stores, a distribution center in Aurora and a candy kitchen in Montrose. The company employs 640 people in the state.
“We started in Denver,” Ward said. “It’s our turf. That’s our original home.”
The company launched in Denver in 1923 and moved its headquarters to Kansas City in 1932.
Ward said Russell Stover has focused on its retail stores recently. The company upgraded all but 15 of its stores nationally with full ice-cream parlors and in-store candy kitchens.
Staff writer Andy Vuong can be reached at 303-820-1209 or avuong@denverpost.com.
