M&M Meat Shops poised to swallow Laura Secord

Laura Secord was put up for sale by Archibald last year after the parent ran into problems with its own U.S. chocolate business, ultimately being forced into bankruptcy protection. The sale of Laura Secord comes under U.S. Chapter 11 bankruptcy proceedings, in which Archibald has chosen M&M as its most attractive bidder, or so called "stalking horse."

The Globe and Mail
June 22, 2004

M&M Meat Shops poised to swallow Laura Secord
Marina Strauss

Laura Secord, the iconic Canadian chocolatier named after a heroine of the War of 1812, may be swallowed by frozen food chain M&M Meat Shops Ltd.

M&M is the lead bidder for Laura Secord, offering about $25.5-million to buy the retailer from its parent, Archibald Candy Corp. of Chicago.

"This is the highest and the best bid," Rick Anglin, chief financial officer at Archibald, said in an interview.

If the deal were successful, it would be the first time since 1999 that Laura Secord would be Canadian owned.

As well, it would be the first foray for M&M into chocolates, although the meat chain already sells frozen cakes, pies and ice cream and could eventually add chocolates to its shelves, Kerina Elliott, a vice-president at M&M in Kitchener, Ont., said.

M&M would like to expand the 160-store Laura Secord chain and possibly look at some "strategic alliances," although not necessarily a combined Laura Secord and M&M shop, she added.

"We would like to strengthen and continue to build on the business," she said in an interview. "Definitely we're always open to innovative and creative ideas and looking at new business opportunities."

Laura Secord was put up for sale by Archibald last year after the parent ran into problems with its own U.S. chocolate business, ultimately being forced into bankruptcy protection. The sale of Laura Secord comes under U.S. Chapter 11 bankruptcy proceedings, in which Archibald has chosen M&M as its most attractive bidder, or so called "stalking horse."

Other would-be buyers will be able to review Archibald's agreement with M&M and submit competing bids, Rupert Chartrand, a lawyer for Archibald, said.

The sale is expected to close by the end of September.

Meanwhile, to facilitate the cross-border auction, Laura Secord will apply today to Ontario Superior Court to be put under interim receivership "with limited powers," Mr. Chartrand said.

Laura Secord is technically insolvent because of its legal obligations to its parent company, he said. But as a retailing operation, it is perfectly sound — making an undisclosed profit with annual sales of more than $70-million, said Tim Weichel, president of Laura Secord.

"The company continues to enjoy tremendous good will, healthy performance, positive cash flow and solid results," Mr. Weichel said.

He said the receivership, if granted, will involve only the sale process and will not touch the chocolatier's operations. "The business will continue in the normal course and under management's direction … Laura Secord is not in monetary default of any of its obligations."

Laura Secord's chocolate production was taken over earlier this year by Ganong Bros. Ltd. of New Brunswick. It was previously supplied by Archibald in Chicago.

Other interested prospective buyers of Laura Secord included Al Pace, president of real estate investment firm Continental Saxon Group, which bought clothing retailer Cotton Ginny in early 2003, and Michel Auclair at buyout specialist Schroders & Associates Canada Inc. Hallmark Canada had teamed up with M&M last year to take a look at buying Laura Secord, but Hallmark is not part of the current deal. Laura Secord runs some combo stores with Hallmark.


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