Michael Bleby Reporter

Michael writes on emerging markets, architecture and engineering. He has served as a correspondent in Tokyo, London and Johannesburg and has written for Reuters, the Financial Times, The Age and The Sydney Morning Herald.

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Dog days for Darrell Lea

Published 13 September 2012 05:00, Updated 13 September 2012 09:25

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Darrell Lea will disappear from Australia’s high streets as a retail store but the failed chocolate maker, which last week was sold to the Gold Coast-based Quinn family, will continue as a brand distributed through independent local retailers, grocery stores and export channels.

Poorly selling product lines, such as Bo-Peep boiled lollies, will get the chop under a makeover that will cost the owners of VIP Pet Foods, BRW Rich listers Tony and Christina Quinn, about $25 million. Darrell Lea’s Kogarah headquarters in Sydney will be closed and manufacturing moved west to Ingleburn, where the pet food business has an operation.

Moving to the pet food stable is a change of style for the household name that had an estimated 4.1 per cent of the chocolate and confectionary market but it shows that despite earlier concerns, the Darrell Lea name, long associated with licorice and Rocklea Road confection, will not go to the dogs.

There are, in fact, parallels between confectionary and pet food, says 30-year-old Karl Quinn, who will oversee the transformation.

“It’s very much like pet food. It’s quite an exciting business,” Quinn tells The Australian Financial Review.

“Basically, you can dream up anything. As long as you can sell it and the people eat it – or the animal eats it – you feel good about it.”

Quinn managed the turnaround of the Dubbo-based Bush’s pet food business which the family bought in 2009 and the shake-up he’s planned for Darrell Lea is severe. Just 83 manufacturing and administration staff will remain, while 246 permanent and 172 casual staff have been made redundant.

The company, founded in 1927 by Harry Lea, lost $3.3 million last year. The Lea family, which continued to own the company, reportedly rejected a $50 million purchase offer for it in 2007.

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