Small to Big: Build the candy em­po­ri­ums, and they will come

It’sugar

Bloomberg Businessweek (North America) - - Contents - Edited by Cristina Lind­blad Bloomberg.com

Founded 2006 Head­quar­ters Deer­field Beach, Fla. Stores 96

Back­ers Pren­tice Cap­i­tal, Star Av­enue Cap­i­tal Jeff Ru­bin, 52, has al­ways had a sweet tooth. Af­ter cre­at­ing a candy busi­ness for the FAO Schwarz toy store and co-found­ing Dy­lan’s Candy Bar, he de­cided it was time to strike out on his own. Backed with pri­vate eq­uity money, he opened a store called It’sugar on the At­lantic City board­walk in 2006. It’s not your penny- candy em­po­rium of yore: The mer­chan­dise in­cludes items such as Camel Balls (sour bub­ble gum) and Fling­ing Poo (choco­late-cov­ered ba­nana chips). To­day, Ru­bin heads what he says is the largest spe­cialty candy chain in the world, with 96 lo­ca­tions, all but 4 com­pany- owned, and sales north of $70 mil­lion. �As told to Craig Gi­ammona I knew there wasn’t a war on candy. Noth­ing in the data I was see­ing told me peo­ple didn’t like candy. I wanted to em­brace it. A lot of peo­ple told me it was crazy, but the stigma with sugar is sep­a­rate from candy. Peo­ple want to cut down on sugar, but they’re not go­ing to swear off candy. Soda, maybe—but not candy. I started off go­ing af­ter re­sort-type lo­ca­tions, where peo­ple are on va­ca­tion. I want them com­ing off the beach in flip-flops—they’re a lit­tle hap­pier. That first lo­ca­tion was re­ally at the 50-yard line, right out­side of Cae­sars Palace. That’s still one of our top lo­ca­tions. I grew up Michi­gan. My fa­ther was al­ways in re­tail. He had a chain of toy stores in the Mid­west that he sold, and he then got into bulk candy when that was the craze in the 1980s. I’ve seen the faces of peo­ple when they buy candy—it’s fun. That’s what I was go­ing for when I went out on my own. I fi­nally got the guts, and enough money, to par­lay what I knew into my own con­cept. We try to be dif­fer­ent— it’s not like peo­ple see 5,000-square-foot candy em­po­ri­ums back in their lo­cal mall. We want the stores to be en­ter­tain­ing. We don’t sell a box of gourmet choco­late gummy bears; we sell a box of Din­gle Bearies. We part­ner with the big com­pa­nies—nestlé, Her­shey, Mon­delēz— they’re very sup­port­ive. Last year we cre­ated the world’s largest box of Sour Patch Kids. Like ev­ery­body else, we pulled back dur­ing the fi­nan­cial cri­sis. But I no­ticed some­thing in the sec­ond half of 2009: Sales were up. Peo­ple weren’t cut­ting back on Swedish Fish. So we started open­ing stores again. We were for­tu­nate—we took pri­vate eq­uity money in 2012, and that helped us ex­pand. We’ll have 100 stores by the end of the year. I think there could be a lot more. It works in dif­fer­ent for­mats: in malls, in sta­di­ums, out­side movie the­aters. Amer­ica has a love af­fair with candy.

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