August 23, 2012

BETTER FIND A GOLDEN TICKET:

Tootsie's Secret Empire : A CEO in His 90s Helms an Attractive Takeover Target. So What's Next? No One Really Knows (BEN KESLING, 8/21/12, WSJ)

The 116-year-old company, run by one of America's oldest CEOs, has become increasingly secretive over the years, severing nearly all of its connections to the outside world. Tootsie Roll shuns journalists, refuses to hold quarterly earnings calls, and issues crookedly-scanned PDFs for its earnings releases. The last securities industry analyst to maintain coverage of the company stopped last year because it was too hard to get information.

"I think the only way you can get a tour is by jumping over the fence and sneaking in," said the last analyst to attempt the task, Elliott Schlang of Cleveland firm Great Lakes Review.

The chairman and chief executive of Tootsie Roll is Melvin Gordon, a bespectacled man in his 90s who has headed the company for 50 years. He runs it with his 80-year-old wife, Ellen.

Decades of acquisitions have given Tootsie Roll a product gallery of mostly antique--though profitable--candy brands, including Charleston Chew, Sugar Babies, Junior Mints, and Blow Pops, in addition to the company's chewy, brown namesake. Mr. Gordon likes to joke with visitors about the Tootsie Roll's robust shelf-life, and he and his wife have worked hard to ensure that the company stays out of the clutches of competitors. The Gordons control the company, primarily through their majority ownership of its powerful class B stock, each share of which is worth 10 votes to common stock's one vote. [...]

Tootsie Roll's Chicago headquarters is a modern-day Willy Wonka factory. Massive puffs of steam billow out of humming machines on the roofs of the gray cinder block and red brick buildings, which sit surrounded by off-kilter "no trespassing" signs. The Gordons haven't granted an interview in years. 

Posted by at August 23, 2012 4:32 AM
  

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