Mrs. Fields Wouldn't Bite When a Rival Offered $50 Million in 2015By and
Interbake Foods sought to acquire retail sales, gifting units
Offers made public in lawsuit over licensing-pact dispute
Interbake, which makes Girl Scout cookies and store-brand treats for Wal-Mart Stores Inc. and other retailers, originally offered $36 million in 2014 for the unit that sells Mrs. Fields cookies at grocery and convenience stores and upped its offer to $50 million a year later, Bijan Amini, a lawyer for Mrs. Fields, said Friday in a court hearing.
Despite some recent struggles, Mrs. Fields may still be worth $50 million to a large food company because of its strong brand, said Darren Tristano, president of Chicago-based Technomic Inc., an industry research and consulting firm. "Knowing what we know, that number is reasonable," Tristano said in an interview Friday.
Richmond, Virginia-based Interbake’s buyout offers were made public Thursday during arguments in a lawsuit filed by Mrs. Fields that claims its rival sabotaged a retail-licensing agreement between the two bakers after Interbake’s bids were rejected.
Mrs. Fields, based in Bloomfield, Colorado, wants Delaware Chancery Court Judge Andre Bouchard to award as much as $28 million in damages for Interbake’s move to pull out of a five-year agreement to handle retail sales of cookies and brownies.
‘Cannibalize the Business’
Interbake should be punished for working to “wrongfully dismantle and cannibalize the business once it could not purchase it,” Mrs. Fields’ lawyers said in court filings. They also said in the filings the $50 million offer was for the company’s “branded retail and gifting business.”
Geoff Wilson, a spokesman for Interbake’s parent George Weston Ltd., didn’t respond to calls seeking comment on the offers. Tom Ragones, a spokesman for Mrs. Fields parent Famous Brands International, declined in an e-mail to comment on them.
While Mrs. Fields has name recognition, the brand wasn’t among the top 20 U.S. cookies during the past 12 months ending in September 2016, according to data from consumer research firm IRI. Global-snack giant Mondelez International Inc.’s Oreos and Chips Ahoy are the largest cookie brands in the $8 billion market.
In the lawsuit, Mrs. Fields officials claim Interbake executives failed to live up to promises to hit retail-sales targets and of conspiring to steal its recipes and customers after its buyout offers were rejected.
Its partner also shared Mrs. Fields’ confidential pricing and marketing information with Back to Nature Foods, a cookie maker owned by Mondelez and private-equity firm Brynwood Partners, according to court filings. Mrs. Fields accuses Interbake of plotting to replace its retail offerings with Back to Nature’s treats.
“They were supposed to be marketing us and they gave our marketing information to a competitor,” Amini told the judge.
Interbake countered in court filings that it walked away from the licensing agreement in April 2016 after discovering Mrs. Fields had misled it about retail-sales figures and failed to properly promote the brand.
Interbake only shared “publicly available” marketing and pricing data with Back to Nature and never offered any of its partners’ recipes to the rival baker, Damon Leichty, one of Interbake’s lawyers, told Bouchard.
The case is The Mrs. Fields Brands v. Interbake Foods LLC, CA12201, Delaware Chancery Court (Wilmington).