Hershey to Close Direct Unit

The Hershey Co. said on Thursday it will close its gifts catalog and Web businesses on July 31, eliminating about a dozen jobs. The chocolatier plans to clear out the gifts inventory with a 25% closing sale discount.

“Hershey has made the strategic decision to exit the Hershey Gifts business. The present business model is not sustainable,” said spokesman Kirk Saville in a statement. The company “will continue to evaluate all options in e-commerce, including strategic partnership and licensing agreements.”

Saville told The Patriot News (Harrisburg, PA) that while the online store, Hersheygifts.com, will stop taking orders July 31; the division won’t officially close until Aug. 28. Consumers can continue to purchase Hershey items directly at Chocolate World in Hershey, PA, and at Hershey Times Square in New York and Hershey Chicago.

Hershey Co. in March 2007 laid off about 50 employees in the catalog and online gift department when it decided to outsource those positions. The company signed a multiyear agreement to have King of Prussia, PA-based GSI Commerce handle the Hershey’s Gift and Mauna Loa catalogs and Websites.

In fiscal year 2008, Hershey recorded sales of $5.1 billion. The company’s net income rose 6.6%, to $311.4 million.

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