Russell Stover closing earlier than anticipated because of COVID-19

Russell Stover will be buying the property it has sat on since it moved to Montrose. As stated in its contract, the company can buy the city-owned property for $1.

Tuesday morning brought unwelcome news to Russell Stover Chocolates employees in Montrose: the local retail store and candy factory will close up shop months ahead of original plans, owing to the economic hit from the pandemic declared over COVID-19.

Instead of March, 2021, the longtime Montrose staple will wrap up operations here Aug. 28.

“We expect to have the plant operating through the end of August, (closing) sooner than we anticipated, but no one could have anticipated COVID-19 back in January. There are repercussions from the pandemic across all industries, ours included,” Jim Kissinger, vice president of human resources for Russell Stover Chocolates, told the Montrose Daily Press on Tuesday.

“The timing has been accelerated. The decision for closure remains the same, but the timing was impacted by COVID.”

The Montrose plant had been operating despite COVID-19 restrictions, with safety measures including temperature checks, partitions between workers, face masks, and increased deep sanitation, Kissinger said.

Employees started to be notified early Tuesday morning; those scheduled to work were given the day off so they would have some time to process the news.

“I think it’s appropriate for them to go home and realize, and think about this, versus being expected to work on their shift,” Kissinger said.

Russell Stover announced earlier this year that after 45 years in Montrose, it was pulling stakes and shifting production to locations in Texas and Kansas, due to a change in consumer buying patterns — preferences in types of chocolate, and delivery methods.

Kissinger said the decision was not driven by Colorado’s minimum wage laws. Of the 220 employees who remain at Russell Stover here, a wide range of wages is paid, depending on positions, he said.

Although the local closure will take place sooner than anticipated, the plan remains to shift production to the other plants, and to keep promises made to local employees concerning retention payments and bonuses, Kissinger said.

“We are strongly encouraging and continuing to encourage employees to continue their careers with Russell Stover at one of our other plants. We think they have great experience we would like to utilize,” Kissinger said.

About 110 employees have departed Russell Stover since the initial closure announcement, he said.

“It’s just another sign of what COVID-19 has done to the economy,” Montrose County Economic Development Corp. Executive Director Sandy Head said.

“If it hadn’t been for the virus, their plans would have followed through, at least until the first of next year. Along with all the other hits the economy has taken, that’s one more. It’s just really unfortunate. … It’s unfortunate, but I don’t think it’s a surprise to anyone in the community.”

Head pointed to the recent decision by vaccine development company COVAXX to withdraw plans to locate its headquarters here.

The company had sought assurances from the county about the possibility of on-airport access from adjacent property at 1 Creative Place, for its cargo shipments. Such access requires several federal approvals and Montrose County could not make promises, but told COVAXX nothing precluded it from operating off-airport and trucking its cargo to 1 Creative Place.

COVAXX’s co-founder previously said he thought Russell Stover workers could be trained for positions at his company.

Russell Stover began in 1923. Acquired by Chocoladefabriken Lindt & Sprünglie in 2014, it operates here in a 330,000 square-foot building. It built a new retail store on the property in 2012.

The buildings are being marketed by a Tennessee firm on behalf of Russell Stover, Head said. The City of Montrose owns the land on which the buildings sit, and the company leases the property.

Head said interest in the buildings is still being seen, although talk has slowed since the pandemic hit.

“Everybody’s economic situation has changed. There are a few companies still trying to reach out, expand, and be in the area,” Head said.

“We have lots of things lined up; we just have to find the right company and have all of our partners on board to make sure it can happen.”

Kissinger said Russell Stover is actively working with the city, as well as marketing the buildings as a way to mitigate the impact of the decision.

“From the city’s point of view, we really want them to find a buyer and we will do whatever we can to help in that regard,” Montrose Mayor Barbara Bynum said. “We don’t want to see the building empty and let that drag on for a year or two. They agree, they don’t want to see that building empty as well.”

Bynum said some of the interest in the factory building came from companies that make cleaning or health products.

“I think a lot of the potential businesses were concerned they needed a building before March 2021. If there’s a silver lining at all, it might be that businesses that are potentially interested in buying the facility will come back sooner than later,” she said.

State Sen. Don Coram said he is working with a few interested companies that need the kind of space the Russell Stover factory provides, and that would be a good fit. “It will keep some jobs in Montrose,” Coram said.

The timing of the moved-up closure date coincides with the start of fall classes at Colorado Mesa University, which has offered free semesters at its Montrose campus to displaced Russell Stover workers, Bynum also said.

“Companies need to make decisions that fit their business model to keep profitable,” Montrose County Commissioner Keith Caddy said. “I hate to see the jobs leave the community sooner than initially projected, but as I said, it’s up to Russell Stover to make decisions that keep the company profitable.”

The accelerated closure date was not entirely a surprise, although it is a disappointment, Bynum said. Perhaps, though, it will help the community move on past the inevitable, she added.

“It’s a little like ripping the Band-aid off quickly, instead of ripping the Band-aid off slowly. It’s sad, but it will present some opportunity for the community as well,” the mayor said.

Kissinger reiterated the company’s original intent had been to stay here until March.

“That was our plan, but plans change and clearly plans change in light of the pandemic. The pandemic has been non-discriminatory in its impact on our economy,” he said.

“ … It’s nothing we look forward to. We’ll do the best we can to honor our commitments to employees and the community that we’ve been a part of for so long.”

Katharhynn Heidelberg is the Montrose Daily Press assistant editor and senior writer. Follow her on Twitter, @kathMDP.

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