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Candy Club (ASX:CLB) - Chairman, James Baillieu
Chairman, James Baillieu
Source: Financial Review
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  • Candy Club (CLB) has disclosed a marketing deal with a United States magazine publisher to the ASX today — a deal signed two months ago
  • The subscription-based candy delivery business struck the deal with A360 Media Entertainment Group in January 2021
  • However, the company said it chose not to disclose the deal because it was not considered material and price-sensitive information
  • Now, an article published this week by an Australian newspaper has spoken highly of the deal and outlined some key details
  • Candy Club Chairman James Baillieu was quoted in the article spruiking the marketing deal, although he admitted it’s too early to tell if it will “bear fruit”
  • It’s not clear why Candy Club chose to disclose the information now, but the company said it will make another ASX announcement if the deal results in any substantial sales
  • Shares in Candy Club are down a slight 2.13 per cent this afternoon to trade at 23 cents per share

Candy Club (CLB) has disclosed a marketing deal with a United States magazine publisher to the ASX today — a deal signed two months ago.

The subscription-based candy delivery business struck the deal with Accelerate 360, also known as A360 Media Entertainment Group, in January 2021. A360 publishes household magazines like Men’s Journal, In Touch, Us Weekly, and OK!.

Candy Club said it initially chose not to disclose this deal to shareholders because, in management’s view, it was not considered to be price-sensitive information and, as such, did not warrant disclose under ASX listing rules.

So, what changed?

A sweet scoop

The call to backpedal and formally disclose the A360 marketing deal comes after an Australian newspaper ran a story about the deal this week.

The paper spoke highly of the deal and revealed that A360 will even take an equity position in Candy Club based on achieving sales targets through the marketing deal.

In the exclusive article, the deal was outlined in the context of Candy Club Chairman James Baillieu tasting “sweet success” in the U.S. with A360.

Candy Club’s Chairman, James Baillieu, was quoted in the piece spruiking the nature of the A360 deal, saying A360 wants to “pitch Candy Club products to go alongside their magazines in the retailers they have relationships with.”

Although, admittedly, the Candy Club Chair said it is too early to tell whether the partnership will “bear fruit”.

And this is the tune Candy Club kept in its official ASX announcement; the company said the deal has not resulted in any sales yet and there is no guarantee it will bring about sales in the future. In fact, Candy Club management said it has not yet budgeted for any sales under the A360 deal in its internal forecasts.

“If at such time the agreement does result in material sales the company will update the market via ASX announcement,” management said said.

The ASX announcement did not reference the potential equity position A360 could take in Candy Club based on sales targets.

Nevertheless, it’s not clear why Candy Club chose to disclose the information now: did the article sugarcoat the A360 deal a little too much, or is Candy Club simply erring on the side of caution to avoid a slap on the wrist by the market operator?

James took over as Candy Club Chairman in September 2019. He currently owns just over 20 per cent of the company.

Shares in Candy Club are down a slight 2.13 per cent at 1:13 pm AEDT, trading at 23 cents per share. The company has a $70.1 million market cap.

CLB by the numbers
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