Candy Warehouse Files Chapter 11 Bankruptcy Days Before Halloween

In a particularly ill-timed development, CandyWarehouse.com, Inc. filed for Chapter 11 bankruptcy protection on October 24, 2025—just one week before Halloween, traditionally one of the biggest candy sales periods of the year. The Sugar Land, Texas-based online retailer joins a growing list of companies struggling with financial pressures in 2025's challenging retail environment.

A Family Business Facing Financial Headwinds

Founded in 1998, Candy Warehouse built its reputation as a woman-owned, minority family business specializing in bulk candy and snack product sales. The company's business model centered on serving both individual consumers and commercial clients, including hotels, hospitals, theme parks, restaurants, and event planners.

According to court documents filed in the U.S. Bankruptcy Court for the Northern District of Texas, the company listed assets estimated between $100,000 and $500,000, while liabilities ranged from $1 million to $10 million. Attorney Robert Lane of The Lane Law Firm PLLC is representing the case, which has been assigned case number 3:25-bk-34192.

The filing reveals the company registered between 1-49 creditors, with a hearing session scheduled for October 29, 2025, to address multiple approval requests. Through this filing, Candy Warehouse is seeking court approval to cover key operating expenses during the restructuring period.

Revenue Decline Signals Deeper Industry Challenges

The bankruptcy didn't come without warning signs. According to data from Grips Intelligence, Candy Warehouse's online store generated approximately $4.5 million in annual sales in 2024—a decline of 10% to 20% from the previous year. More concerning was a 20% revenue drop during the critical May through July period compared to the preceding three months.

In August 2025, the company generated $203,555 in revenue from 2,030 transactions across 216,677 website sessions, with an average order value between $100-125. While these August figures showed some stability, analysts at Grips Intelligence project that Candy Warehouse's 2025 annual revenue could drop by 20% to 50%, with the downward trend expected to accelerate.

Competitive Landscape Pressures

Candy Warehouse faces stiff competition in the online bulk candy market. Competitor candyfavorites.com outperformed Candy Warehouse in August with $218,859 in revenue from 3,110 transactions and 118,085 sessions. Meanwhile, Allcitycandy.com generated $108,836 with a slightly higher average order value of $125-150.

Industry-Wide Headwinds Affecting Candy Retailers

Candy Warehouse's struggles reflect broader challenges facing the confectionery industry. Consumer preferences have shifted dramatically in recent years, with health-conscious shoppers increasingly seeking alternatives to traditional sweets.

"Consumers are looking for across the board, post-pandemic, ways to get in vitamins or other supplementary dietary needs," Alina Morse, CEO of Zolli Candy, told Snack and Bakery. "Adults are looking for functional hard candies, with zero sugar, mint, and fruit flavors."

A 2023 study found that 47% of consumers actively seek out "healthy" candy options to reduce sugar intake, fundamentally changing the market dynamics for traditional candy retailers.

Soaring Cocoa Costs Impact Pricing

Beyond changing consumer preferences, candy companies have grappled with unprecedented cost increases. Cocoa prices worldwide surged 178% in 2024, according to FactSet data cited by CNN. Poor harvests in Ghana and the Ivory Coast—which together produce 60% of the world's cocoa—drove prices to historic highs due to climate-related challenges.

Even as cocoa costs moderated in 2025, manufacturers who purchased ingredients at peak prices maintained elevated retail prices. Hershey's variety pack prices rose 22% in 2024, while Reese's Peanut Butter Cups increased 8%. Even non-chocolate candies like Sour Patch Kids saw price hikes of 9.4%.

In July, Hershey announced price increases to retailers, explaining the need "to reflect the reality of rising ingredient costs including the unprecedented cost of cocoa." Some Hershey products faced increases as high as 26%, hitting convenience stores and other retailers hard.

What Chapter 11 Means for Candy Warehouse

Unlike Chapter 7 bankruptcy, which involves complete liquidation, Chapter 11 allows companies to continue operating while reorganizing their finances under court supervision. This process gives Candy Warehouse the opportunity to restructure debt, renegotiate contracts, and develop a plan to return to profitability.

The company's extensive inventory—comprising over 6,000 products including name-brand candy bars, chocolates, hard candy, lollipops, jelly beans, gummy bears, Mexican candy, Japanese candy, and seasonal items—represents significant value that could help fund the restructuring.

Candy Warehouse has emphasized its commitment to quality, stating on its website: "We refuse to sell stale, closeout candy—only the best, most delicious sweets make it into our warehouse." The company also prides itself on maintaining an in-house customer service team and warehouse workers, rather than outsourcing operations.

Part of a Broader Retail Bankruptcy Wave

Candy Warehouse's bankruptcy filing comes amid a wave of retail restructurings in 2025. Earlier in October, fashion watch retailer Fossil Global Services Ltd. filed for Chapter 15 bankruptcy after struggling for a decade against high-tech competitors like Apple Watch and Samsung Galaxy Watch. Fossil's sales plummeted from $1.7 billion in 2022 to $1.1 billion in 2024.

The aviation sector has also seen distress, with Kachina Air, Inc. filing for Chapter 11 bankruptcy on the same day as Candy Warehouse, citing soaring fuel costs as a primary factor.

Looking Ahead: Can Candy Warehouse Recover?

The outcome of Candy Warehouse's bankruptcy will determine whether the 27-year-old company can adapt to changing market conditions and consumer preferences. The company's diverse customer base—spanning both individual consumers and commercial clients—provides multiple revenue streams that could prove valuable during restructuring.

However, the company faces significant challenges: declining revenues, shifting consumer preferences toward healthier options, intense online competition, and industry-wide cost pressures. Success will likely require not just debt restructuring, but fundamental changes to the business model, potentially including expanded offerings of sugar-free and functional candy products that align with current consumer trends.

As the bankruptcy proceedings unfold, stakeholders will be watching closely to see if this family-owned business can preserve its brand and nationwide customer base while navigating one of the most challenging periods in the confectionery industry's recent history. The October 29 hearing will provide initial insights into the court's reception of the company's restructuring plans and its path forward in an increasingly competitive and health-conscious marketplace.