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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) November 30, 1998
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ARCHIBALD CANDY CORPORATION
(Exact name of registrant as specified in its charter)
ILLINOIS 333-33751 36-0743280
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File No.) Identification No.)
1137 WEST JACKSON BOULEVARD,
CHICAGO, ILLINOIS 60607
(Address, including Zip Code,
of Principal Executive Offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 243-2700
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No Change
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(Former name or former address, if changed since last report)
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ARCHIBALD CANDY CORPORATION
ITEM 5. OTHER EVENTS.
Reference is made to the press release of Archibald Candy Corporation,
an Illinois corporation (the "Company"), dated November 30, 1998 attached hereto
as Exhibit 99.1 (the "Press Release") and incorporated by reference herein. The
Press Release announces that the Company has executed an agreement pursuant to
which the Company has agreed to acquire Sweet Factory Group, Inc. for
approximately $28.0 million in total consideration.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
C. Exhibits.
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Description Exhibit
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Press Release dated November 30, 1998 99.1
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARCHIBALD CANDY CORPORATION
(Registrant)
Dated: December 2, 1998 By: /s/ Ted A. Shepherd
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Name: Ted A. Shepherd
Title: President and Chief Operating Officer
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EXHIBIT INDEX
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Description Exhibit
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Press Release dated November 30, 1998 99.1
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Exhibit 99.1
LEGENDARY CHICAGO CANDY MAKER SIGNS
AN AGREEMENT TO ACQUIRE
"Sweet Factory"
(Chicago, IL) -- Archibald Candy Corp., manufacturer and marketer of Fannie
May-Registered Trademark-/Fanny Farmer-Registered Trademark- boxed chocolate
brands, announced that it has signed an agreement to acquire Sweet Factory.
Based in San Diego, CA, Sweet Factory is a leading bulk candy retailer with 256
stores operating in 36 states.
Sweet Factory has a proprietary and contemporary store design and
merchandising concept. A typical store sells 150-200 confectionery products
in a self-service, pick and mix format. The majority of these products are
non-chocolate items such as gourmet jelly beans, gummi, sour, and licorice
products. The chain enjoys a broad customer base.
"Sweet Factory is particularly suited to our strategic vision," said Ted
Shepherd, President and Chief Operating Officer of Archibald Candy Corp. "It is
an exciting, dynamic confectionery retailer that has facilitated and capitalized
on the growth in non-chocolate confections. By operating a leading specialty
non-chocolate retail chain, as well as two leading specialty boxed chocolate
chains, there will be synergies and efficiencies to be gained."
Archibald Candy Corp. expects the acquisition to provide several synergies
including:
- EXPANDED CROSS-CHANNEL MARKETING OPPORTUNITIES FOR SWEET FACTORY. The
acquisition will open up new channels of distribution for the Sweet
Factory brand through several existing Fannie May sales channels,
including the mail and quantity order catalogues, kiosks, fundraising,
and card and gift stores.
- INCREASED DISTRIBUTION FOR FANNIE MAY. The acquisition will provide
national distribution, and access to key high volume markets for the
Fannie May brand. The plans include offering Fannie May chocolates in
Sweet Factory stores with packaging targeted at the Sweet Factory
consumer.
Sweet Factory has broad distribution and a double-digit store count in high
volume markets like New York, California, Florida, and Texas. Besides prime
real estate locations in leading malls, Sweet Factory has opened stores in
transportation terminals, specialty centers and kiosks in sports venues and
public areas. All Sweet Factory stores are company-owned.
Archibald Candy Corp. has agreed to pay approximately $28 million in total
consideration for Sweet Factory. Archibald Candy Corp. expects to fund the
acquisition through the issuance of
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$30 million of senior secured debt. The closing of the acquisition is
subject to certain conditions, including the receipt of certain third-party
approvals and consents. The acquisition is expected to close in December
1998.
Founded in 1921, Archibald Candy Corp. sells its Fannie May and Fanny
Farmer candies primarily in the midwestern and eastern United States in 317
company-operated stores and approximately 8,000 third-party retail outlets, as
well as through quantity order, mail order, and fundraising programs. Upon
completion of the Sweet Factory acquisition, Archibald Candy Corp. will operate
573 retail stores in 40 states.
# # # # #
THIS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS REGARDING FINANCING AND
OTHER BUSINESS PLANS, AND FUTURE PERFORMANCE. THESE FORWARD-LOOKING STATEMENTS
ARE BASED ON CURRENT PLANS AND EXPECTATIONS AND ON CURRENTLY AVAILABLE
INFORMATION AND ASSUMPTIONS THAT ARCHIBALD CANDY CORP. BELIEVES TO BE
REASONABLE. HOWEVER, FORWARD-LOOKING STATEMENTS NECESSARILY INVOLVE RISKS AND
UNCERTAINTIES, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE SUGGESTED.
CERTAIN FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY INCLUDE,
BUT ARE NOT LIMITED TO: THE ABILITY TO COMPLETE AND INTEGRATE THE ACQUISITION,
THE ARCHIBALD CANDY CORP.'S SIGNIFICANT LEVERAGE AND DEBT SERVICE REQUIREMENTS,
COMPETITION AND FLUCTUATIONS IN THE COST OF SALES.
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