The collapse of Australian chocolate and confectionery business Darrell Lea yesterday was met with cries of dismay from chocoholics, lovers of liquorice and fans of Darrell Lea’s famous Rocklea Road, but retail analysts were not surprised by the iconic brand’s demise.
Darrell Lea was placed in voluntary administration, with administrators PPB Advisory appointed and more than 700 jobs on the line.
The 100% family-owned chocolate and confectionery group has been in business since 1927 and began with Harry Lea selling Bulgarian Rock from a pushcart before moving to a small factory under the first arch of the Sydney Harbour Bridge.
Over the years, Darrell Lea expanded to 74 full-range stores and 2,006 Darrell Lea stockists throughout Australia and set up export businesses to the United Kingdom and United States.
The company has a colourful history full of family feuds and a protracted legal battle with Cadbury over Darrell Lea’s use of the colour purple.
From the start, Darrell Lea was a family business, named after the original Lea family’s youngest son, but these close family ties led to a breakdown in the relationship between key family members.
“Now you may say that blood is thicker than water and where’s your loyalty?”, Jason Lea told the ABC TV series Dynasties in 2005.
“Look, I don’t know, I am what I am, and I’d say that my loyalty is more towards the business.”
Jason was one of Harry Lea’s grandchildren and rose to the top of the Darrell Lea business before dying of leukaemia in 2005.
When Jason died, his son, Jason Jnr, and brother, Lael Lea, were not speaking to him after Jason made both his son and brother redundant during his tenure as managing director of Darrell Lea chocolates.
“He just wasn’t the right person for the job,” Jason Lea told Dynasties when discussing his decision to sack his son Jason Jnr.
“He would have been a square peg in a round hole or vice versa.”
Similarly, he defended his decision to make his brother Lael Lea redundant after 40 years in the family business.
“You put your whole life into the family business and you’re out,” Lael Lea told Dynasties.
“You kid yourself you’re still part of a concern when you really know you’re not.”
“The business is my life, the business was my life. I think the business will continue to be my life.”
“That’s what mum had the children for: To be part of the business; to build the business.”
Jason Lea defended his decision to cut family members.
“I might be classified as cold and callous,” he told Dynasties.
“But these decisions were made for the good of the business, not for the good of any individual, and so I’ve never felt guilty about any of these decisions at all, no guilt whatsoever.”
The first non-family chief executive was appointed in 1997, although several family members still work in the business, including executive director Michael Lea, who is Jason and Lael’s cousin.
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
