Strategy

Laura Secord comes home

The chocolate chain is back in Canadian hands. But can they turn it around?

That Laura Secord fell into foreign hands has been regarded as poignantly ironic. Founded in 1913 in Toronto, the chocolate retailer was named for the War of 1812 heroine who warned British forces of an American attack. It was repulsed, but the company itself fell to outsiders in 1983 when beer giant John Labatt Co. sold it to England’s Rowntree Mackintosh. Soon it left the British Commonwealth entirely, when Rowntree was absorbed into Swiss giant Nestle in 1988. The cruellest blow: Nestle sold it to a group of U.S. investors in 1999.

Laura Secord withered over the past decade. The number of stores and employees dwindled as unprofitable locations closed. Now, at long last, it has returned home – to Quebec confectioner Nutri-art, controlled by brothers Jean and Jacques Leclerc. Though Nutri-art did not disclose the purchase price, published reports place it at $19.5 million – below the $27.6 million paid by its previous buyers in 2004. Can Nutri-art turn Laura Secord around?

It still has 128 stores, many of them in desirable locations, and the brand is widely recognized, yet broadly regarded as “your grandmother’s chocolate shop.” Previous owners did limited marketing and product development. Many stores look tired. “Their image isn’t good,” says Ed Strapagiel, executive vice-president of Kubas Consultants, a retail specialist firm. “They’ve not done much over the last five years.”

Laura Secord’s chief retail officer, Raj Sharma, sees signs for hope. Whereas the company previously sourced base chocolate from large U.S. supplier Blommer Chocolate Co., it will now be supplied directly from Nutri-art’s facility in Quebec City. “It’s going to be cheaper to get our base chocolate from Nutri-art,” he says. And Nutri-art can also supply some finished products, 100-gram chocolate bars being one example. Meanwhile, Nutri-art can produce chocolate in higher volumes, improving its own efficiency.

There’s much to do. Sharma concedes critics are right – Laura Secord hasn’t marketed itself properly. “It’s about how we talkto the younger demographic.” Future renovations will be based on a design Sharma hopes to work on this summer. Products will be a mix of old and new. The company is experimenting with coffee, frozen yogurt and soft ice cream, with mixed results. When it comes to coffee, “we’ve got to be specific about what’s around us and what the local needs are,” Sharma says. “If there’s a Starbucks or Tim Hortons next door, we’re not going to be front of mind.”

Under previous ownership, one employee touring a supplier’s plant came across a mould for 500-gram Easter bunnies, a popular product from the 1970s and ’80s. “The person touring the plant said, ‘Yeah, I remember that. I’d love to do it again,'” Sharma says. So the product was resurrected last year.

Strapagiel thinks the company is ripe for turnaround, and should prove a good match for Nutri-art. He suggests it might explore online sales, which is becoming a popular channel for gift items. And it also might benefit from experimenting with social media. “You don’t hear much from them on Twitter or Facebook,” he says. “If they have a reputation as an older person’s store, it’s because they haven’t reached out to younger people.”