Hershey to eliminate online business

Posted Jul 6th 2009 12:00PM by Beth Gaston Moon
Filed under: Consumer Experience, Internet, Hershey Co (HSY)

Want to stock up on Hershey's tasty treats? Get in while the getting is good.

Stating that its "current business model is not sustainable," Hershey Co. (NYSE: HSY) is closing its online store -- HerseysGifts.com -- as of July 31. After that, consumers with a sweet tooth for products such as chocolate-covered Macadamia nuts or a five-bound Hershey bar will have to visit local stores. Products can be customized for special occasions and run from $10 to $150.

But what's potentially bad news for Hershey can be good news for the quick-minded shopper -- all Hershey's Gifts items are 25% off through the end of the month. Just 12 employees will be out of work because of the site's dissolution, and Hershey officials say they hope to find them jobs with the parent company. Company spokesman also said Hershey isn't abandoning the notion of e-commerce, but is considering different opportunities, including licensing and partnerships.

Quarterly earnings and revenue growth has continued for HSY, rising 20% and 6.5%, respectively, on a year-over-year basis, and HSY shares are up 11% in the past 52 weeks compared to a 29% setback in the S&P 500 Index. Today, the stock is slightly higher in a down market, so perhaps investors are considering this step a smart move.

Beth works for The Options News Network (www.ONN.tv), which provides daily stock options commentary. The above comments are not intended as trading advice.

Tags: e-commerce, HerseysGifts.com, hershey, hsy, inthenews, online retail

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Reader Comments (Page 1 of 1)

7-06-2009 @ 12:53PM

Kevin D said...

This sounds more like an internal political decision rather than a losing money decision. It would seem that the retail vendors were very threatened by the online store and probably were the catalyst for nixing this outlet.

That's just pure speculation but I doubt the site was losing money.

7-06-2009 @ 2:30PM

Jon said...

If you are looking for great hand made chocolates or even simple candy bars - The place to go is chocolate.com They have everything you could ever want. I tried it and have shopped there tons. Some of these products will blow you away. Hershey's is good, but you will never eat chocolate like this - http://www.chocolate.com/products/double-hazelnut-caramel/
From Hershey's.

Simply Amazing stuff - so if you want to buy online there is a place for you (I think it is even better)