New Wolfgang owner discusses his interest, plansBrent Burkey
North York-based Wolfgang filed for bankruptcy protection in March, and a previous purchase deal with Alabama-based Divine Serendipity LLC fell through, leaving the door open for the Stillman family's successful offer.
The bid was launched through Food Management Systems Inc., which provides financial services and management to some of the businesses in which the Stillmans have majority or minority ownership stakes, President Michael Stillman said.
Their holdings in Lancaster County include two Dairy Queens and two hotels as well as Mac-It Corp., a maker of special threaded fastener and screw machine products, he said.
The new Wolfgang ownership entity is the recently formed Wolfgang Ventures LLC, and partners also created Wolfgang Operations LLC to run the candy company, said Stillman, the majority owner of both entities.
Stillman spoke this week with the Business Journal about why he was interested in Wolfgang and outlined a vision for the future of the company.
Q: Why did you decide to lead a bid for Wolfgang Candy?
A: We like manufacturing, we understand it well, and I like it that it is in the food industry, and it's an industry that has pretty much been recession-proof.
That was our interest, and we had looked at it before, but it just had such a debt load on it (that) we didn't know how we could make that work. That was before it ever went to bankruptcy, and then we found out it sold at bankruptcy, and it's kind of like, boy, if I knew it would sell for that, I might be interested.
So then when we found out that the original buyer, Divine Serendipity, (that deal) was going to get set aside, that's when we took another shot at it.
Are there any changes you have planned right out of the gate?
This all came down on (Oct. 5), so I've been there and talked to the employees and met them. I've asked the management team to put together a list of things they would like to see in the way of improvements or changes, so I'm really asking for their input, and that's going to be a process.
The biggest change is that they have some cash to operate with now. That's a big, big one. So they're already in the process of letting all the vendors know, and customers, that they aren't going to have any problems on the supply side, so they are going to be able to make their deliveries and those kinds of things.
That's been really positive already … that's the one that needed to change. I don't profess to know everything about the chocolate world and candy, but there are a lot of synergies that we have within our other businesses and contacts that we have that could be a help to the company, but it will take time to identify them and maximize where that leads us.
Why did you decide to bring on Wolfgang family members as part owners?
Ben (McGlaughlin), who is president and CEO, and Brad (McGlaughlin), who is VP of operations, and their father agreed to put an investment into the new entity, and that was a key to us deciding what we wanted to do, because if the current management didn't have enough faith and put some of their own money in, what faith would we have in it? They're the ones there living it and breathing it.
So that was very important to us, and it really says something about the McGlaughlin family, because they've taken a loss already on this. So they've got to be pretty positive that the bumps are behind them now.
What do you see as Wolfgang's strengths and areas for improvement going forward?
I would have to say the strength has got to be the name, the name brand. Ask anybody, and they know about Wolfgang and usually they rave about the chocolate.
In fact, my daughter, who is 15, Sierra, knew more about Wolfgang than I did. She knew it from fundraising and bought the candy because she loves it so much. So she was excited when I told her about it.
I'd say that's the strongest, and being 91 years old. There is a lot of history and I think that is something we can build on.
I'd say the weakness would be (that) they are chopped up into three buildings, and my goal would be to make it profitable and big enough that we could put it all in one building and make it a state-of the art facility, but we're going to have to get the thing back up to full production and humming and then we'll worry about that.
We signed a four-year lease, so we aren't going anywhere soon, and I'm talking moving down the street or somewhere (like that). We're not going to move it out of York.
If you succeed in your vision, what will the business look like five or 10 years down the road?
Like I said, this market is new to me, but I don't know why this couldn't be a national brand. I know there is a strong presence here in Central Pennsylvania and maybe the Northeast, but I'd love to see it national. I'd love to see it, like I said, in one building with state-of-the art equipment and make it even more of a household name.
There are quite a few big players in the chocolate business. What do you have to offer that maybe they don't?
Most of the businesses we are involved with are small. Mac-It is small. We feast off of the crumbs of the giants, and we can be very profitable that way, and my hunch is Wolfgang can do the same.
They already have been doing that, but I think we can position it so that we can get more of those crumbs. And that's fine. We're not going to kid ourselves and say we're going to take on Hershey or Mars. <