Sweet Legacies

Corrections or additions?

This article by Deb Cooperman was prepared for the December 15,

2004 issue of U.S. 1 Newspaper. All rights reserved.

Sweet Deal: Kids Take the Chocolate Factory

In Roald Dahl’s best-selling book "Charlie and the Chocolate Factory,"

Willie Wonka invites five young people from around the globe inside

his factory for an exclusive tour after years of keeping the doors

tightly shut. Wonka is single and has no children – he’s devoted his

life to the art and science of making candy – and in the twilight of

his life, he realizes he has no one to succeed him in the business

that he loves, and he doesn’t want to see it die. So, long before

reality shows were invented, Wonka creates the ultimate "Survivor"

game: the last child standing on the factory tour will be gifted with

the business when he retires.

Windsor chocolatiers Marcy and Robert Hicks didn’t need to search the

globe for successors for their 25-year-old company, Sophisticated

Chocolates. The Hickses found their successors around their dinner

table. The Sophisticated Chocolates business – including the factory

at Windsor Industrial Park, five retail stores, factory retail store,

and online store – will be passed on to all three of their children.

Although there is no legal succession plan at the moment – Marcy and

Robert expect to meet with their lawyers "to work out the details"

("at the moment we’re just trying to get through the holidays," says

Marcy) – chocolate making is all in the family.

This year the company opened five retail stores under the name David

Bradley Chocolates (David and Bradley are the names of the sons), and

in August the company more than doubled its space – to nearly 7,000

feet – at Windsor Industrial Park. It employs 15 people, and in this

busy holiday season it has added 10 temporary workers. The family

declines to provide sales figures, except to say that it annually

transforms 90,000 pounds of raw chocolate into sweet-to-sell treats.

Counting the "center flavor" added to each candy, one can estimate

that the firm probably sells 180,000 pounds a year, and that does not

include the baskets, boxes, and gift tins that add to the profits.

Robert Hicks did not set out to be a chocolatier. Born in Penn Valley

outside of Philadelphia, Robert’s family moved to New York when he was

15. Hicks went to the New York Institute of Finance and got his

brokerage licenses. "I was in the right place at the right time," he

says. "I went down to Wall Street right out of school." Hicks met

Marcy, an Oklahoma native who was a flight attendant for TWA. The

couple married "way too long ago, almost 40 years ago" says Marcy, and

daughter Christine was born soon after.

A reservist in the army, Robert was sent to Vietnam in October, 1968.

When Hicks returned from Vietnam nine months later, the family began

expanding. Sons David and Bradley were born a year apart, and while

Robert went back to Wall Street, Marcy grounded herself to raise the

children.

Not long after, Robert’s mother retired from her career in sales with

RH Macy in New York, and his sister retired from her work as a

bookkeeper with Grand Union. "They were bored," Hicks recounts, "and I

said: ‘I’ll put up some money and you run the business.’" With his and

Marcy’s capital, Robert’s mother’s sales experience, and his sister’s

bookkeeping skills, all fronts were covered. Now they just had to

figure out what kind of business they wanted.

Hicks had a friend who was a pharmacist, and Robert remembers him

commenting on how brisk the sales were with wholesale chocolates in

his store. Robert and Marcy did some research, and when they went to a

chocolate trade show in Philadelphia to get the lay of the land, "the

people were so nice, we said why not?"

"We went backward," says Marcy. "Most people start out in

manufacturing . . . we started out in retail." The first Sophisticated

Chocolates shop contracted with wholesalers for their product, but

eventually the Hickses decided to manufacture their own chocolates.

"We could see there was more money in it," Robert says, "and we could

control the product."

The Hickses leased a factory in Broomall, Pennsylvania and eventually

franchised their stores. "At one point we had 11, but they became

difficult. We had little cafes…cappuccino, espresso, and desserts.

This was over 20 years ago, long before Starbucks. But the people who

owned the franchises wanted to put in hot dogs." That wasn’t what Hick

had in mind. He wanted an upscale cafe feel for his franchisees, and

even though some of them were located in malls, he wanted to

differentiate their stores from the usual food court fare. "That ended

everything – we dissolved the franchise."

Robert continued to work on Wall Street for 15 years, but eventually

left to manage the growing company. After 10 years of building the

business, he went back to Wall Street. "The kids were growing up and I

needed money for college," he explains.

During that time, Marcy ran the factory, and Robert lent a hand on

evenings and weekends. He also distributed pamphlets to colleagues in

Manhattan and picked up a lot of corporate accounts. "He’s a very

ambitious guy," his wife says. "We do a lot of holiday baskets and

gift items," and the New York connections were a great source of

contacts. But "the commute from Pennsylvania to New York was too much

for Bob," Marcy says, and so the company reduced its retail business

to just one outlet and moved its wholesale manufacturing plant to a

2,500 square-foot space in Windsor Industrial Park in Windsor.

The Hicks children got their start in the business with seasonal work.

Christine had finished high school in Pennsylvania, but the boys were

both graduates of West Windsor-Plainsboro High School. "The kids used

to pack the gift boxes and earn a little extra money," says Hicks.

But, "I think that turned them to disliking the business." By the time

they were out of college and ready to embark on their own careers,

"they didn’t want to have anything to do with it," he recalls.

But that didn’t last long. Eventually, all Hicks children returned to

the fold.

In 2001, Robert was starting to think about retiring from Wall Street

for good, and after he and Marcy went on vacation to St. Martin, he

returned with an illness that dragged on and on. Because of that, he

decided to speed up his retirement. That was just two months before

the September 11th attacks. He lost several friends who worked in the

Towers, and he reflects that it was luck that he left when he did. "I

used to go through the World Trade Center every day."

Son David worked for Charles Schwab, surviving several rounds of

post-September 11th downsizing, but eventually one of the lay-offs

touched David and, says Marcy, "the more he thought about it, the more

he realized that he didn’t want to wear a tie any more. He didn’t

really care for the corporate world."

He began helping out at the factory and came up with the idea of

expanding the company to retail stores again. Only this time the

stores are all owned by the company. Sophisticated Chocolates has five

retail stores that bear the name David Bradley Chocolates; they are in

Edison, Cherry Hill, Manalapan, and Voorhees, and Springfield,

Pennsylvania. They began with the support of other son Bradley, who,

according to his mother, "is a computer whiz – pretty much self

taught" and came to the family business after working for several

different computer firms.

Daughter Christine came from the retail world, her last position as a

store manager for the now defunct Hit or Miss discount clothing chain.

"I had to go out and do my own thing," she says of her years in

retail. And although she was successful with her store (which was

located in Rocky Hill), she came to believe that "working for another

company is a weekly paycheck. This is working for my future. Every

reward is what you put into it." Maybe it would be different if her

parents had a plumbing company, she says. "That might not be as

exciting. But who’s going to be cranky here? We really put our hearts

into it." And on the off chance things get tough? "I’ll have a couple

of pieces (of chocolate). That keeps me happy!"

And working with her parents is not a problem at all. On the contrary.

"I consider myself very lucky," Christine says, "I get to see them all

the time. It’s very different from being the daughter. This is work.

We’re all really respectful toward work. Home is home…that’s where

you get the usual Mom and Dad."

When he’s not "Dad," the 63-year-old Robert runs the show as president

and is in charge of general operations; Marcy ("under 60") does the

bookkeeping, Christine, 37, is heavily involved in the look of the

company and the packaging, and she is in line to take the

manufacturing helm when her parents retire ("In one or two years,"

Marcy hopes.).

David (33) and Bradley (32) run the retail stores, with David focusing

on marketing, and Bradley managing the website and computer

operations. Gustavo Arce is the "head candy maker" and production

manager whom "we couldn’t live without," says Marcy. "He’s been with

us 10 years and he trains our people. It’s his expertise that gets us

through the holiday season." At this time of year, and during the

other busy seasons (including Valentine’s Day, Easter, and Mother’s

Day) they hire up to 10 more casual and part-time employees.

Of the family members, "we each have our own little jobs," says

Robert, but there are no set-in-stone roles. "It’s not like a

corporate office where they have a meeting but the boss makes the

decision. If we have a new product or project, conversations can get

heated, but majority wins."

An example of this group process happened earlier this fall, says

Robert. The family decided to add a new hazelnut piece to their line.

"We were going to use flavoring," Robert says, "like a truffle. But

nobody really liked it, even though it was cost effective. Bradley got

some hazelnut paste, he blended it with chocolate." Everyone in the

family tried it "and it was night and day." Even though the process of

making the candy was labor intensive and expensive, the family decided

that it was worth it. They put the candy on sale in small boxes,

instead of selling it by the pound, says Robert, to keep the prices

low. "So they get a little less, but they get a high quality product."

The company is privately owned. In the past it had outside investors,

and as five new stores are added, it will take on more investment.

"Our children have brought people into the company that they knew.

Personal friends who had capital; some are loans, some are silent

partners," explains Marcy. "They don’t have a say in the day-to-day

operations. But when the interest rates sunk so low the investors came

out of the woodwork, willing to take a little risk. And they’re

confident because we’ve been so successful."

It is the attention to the details that makes Sophisticated Chocolates

successful, Marcy says. "We try to keep the packaging upscale, and the

chocolate is fresh and I think you can taste the freshness." All but

the fresh-dipped fruit products for the David Bradley stores are made

in the Windsor factory. "Each store has the ability to manufacture

fresh dipped fruits. Strawberries, oranges, raspberries,

blackberries," she pauses wistfully, "those blackberries were to die

for."

Some of the success of the company is the chocolate itself, but the

Windsor retail/factory location, which moved to a new 6,800

square-foot space in Windsor Industrial Park in August, also boasts a

window where visitors can see chocolate being made. And on the day we

spoke, Robert says he was out in the retail area asking customers for

feedback on different vanilla extracts that the company was

considering buying, and Marcy got called away during our conversation

to greet a regular customer.

There’s really no down side to the work, Marcy says. She recalls

reading an article in a New Jersey magazine a few years ago about the

best jobs in the state. "Chocolatier was number 1," she says. "And

it’s true. It’s one of the best jobs there is. Our customers are nice

to us, and even your competitors are your helpmates." Robert seconds

that and adds, "It’s a simple and happy business. Nobody walks into

our stores in a bad mood. They’re treating themselves, it’s not that

expensive, and they have fun."

And, as it seems, so do the Wonkas of Windsor.

Sophisticated Chocolates Mfg. Inc. (also DBA David

Bradley Chocolates), Windsor Industrial Park, Building 19, Unit G, Box

458, Windsor 08561. Robert P. Hicks, president. 609-443-4747; Home

page: www.dbchocolate.com

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Sweet Legacies

When the owners of a family business are looking to retire and pass on

the business to their children, there are a lot of issues to consider

in the "how" of it. "They could sell it or give it as gifts to their

children," says Kester Pierson, partner at Mason, Griffin & Pierson on

Poor Farm Road. The most important factor, says Pierson, is to develop

a plan and start executing it. "If the owners want to pass on a

business to their children, they’ll first need to have it appraised –

get it valued."

Unlike having a house appraised, Pierson says, a business is a bit

more complicated, and you may need to do it several times. "If they

had it valued now, they could give each child shares worth $10,000

that would be their annual gift tax exclusion. In January they could

give another $10,000 gift." However, if they waited until the end of

2005 to give another gift, they’d need to have the business appraised

again. "If they sell or if they gift, it still has to be based on the

current fair market value of the business," Pierson says. And if the

Hickses sell shares of their business to their children, they will

have to deal with the tax consequences of the sales.

No matter how they decide to execute the transfer of the company,

planning is key. Such a transfer is important in any business, but in

a family business, "it’s a special concern," says Pierson, because

"what if the owner drops dead? Does his will pass on the business to a

spouse? To the children? In equal amounts?" These issues need to be

determined in order to facilitate a smooth transition for the

business. "A business is an asset like any asset, like real estate, or

a portfolio of stock."


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