A century-old, family-owned Chicago candy manufacturer filed for Chapter 11 bankruptcy protection Tuesday, seeking to keep its Northwest Side factory churning out assorted fruit-flavored starlights, lemonade drops and buttery toffee.
Primrose Candy, which has been making such confections since 1928, needs to reorganize more than $12 million in debts and secure new financing to pay its 90 mostly contract employees and other business expenses, according to the bankruptcy petition.
The culprit? That piece of wrapped butterscotch candy that grandma pulls out of her purse has gotten a lot more expensive to make these days, according to David Welch, a Chicago attorney representing the company.
“The cost of making that same piece of candy is so much more than what it used to be, and you can’t keep up with your pricing to absorb all those costs when you have a lot of old debt that you also have to service,“ Welch told the Tribune Wednesday.
Company founders Frank and Mae Puch launched Primrose Candy with $500 and a few years of hands-on experience working at other Chicago candy companies. Their son joined the family business in 1945 and they bought a new factory, near to where the current red brick facility stands on Parker Avenue in the Belmont Gardens neighborhood.
Over the years, Primrose has expanded beyond hard candy into chewy varieties, popcorn and other treats, which are sold in bulk to retailers and marketed under other brand names as a contract manufacturer. The individually wrapped candies include everything from caramels and salt water taffy to colorful peppermints.
Primrose, which is transitioning into the hands of fourth-generation family ownership, generated $7.8 million in revenue last year, down from $11.8 million in 2024, according to the bankruptcy filing.
The largest unsecured creditor is Labor Solutions, a suburban Chicago staffing agency whose contract employees represent the majority of the 90-person workforce at Primrose. In September, Labor Solutions filed a breach of contract lawsuit against Primrose in Cook County Circuit Court. Primrose owes Labor Solutions $7.5 million, according to the bankruptcy filing.
In 2024, Primrose entered into a loan agreement with a $7.5 million line of credit that is now held by Pathward. As part of the Chapter 11 filing, Primrose is seeking to obtain secured financing from that existing line of credit and use cash that served as loan collateral for its ongoing operations.
Obtaining the financing and use of the cash collateral are “essential to maintaining the (candy) business as a going concern,” according to the bankruptcy filing.
Welch said both Pathward and Labor Solutions, which is still providing contract employees to Primrose despite the $7.5 million debt and breach of contract lawsuit, are both supportive of the reorganization case.
Reworking the balance sheet may be the only pathway into a second century for the family-owned candy business, he said.
“What we have is a lot of old, old debt that we just can’t afford to pay in its entirety,” Welch said. “Our hope is to confirm a plan of reorganization down the road, months down the road, that enables us to address that old debt, but not have the old debt be part of our cash flow requirements on a current basis.”
rchannick@chicagotribune.com