I visited the 20,000-square-foot IT'SUGAR candy 'department store' in Time Square and saw how the chain is taking over US cities

Ann Matica/Insider

• The candy retailer IT'SUGAR was founded in 2006 by founder and CEO Jeff Rubin.
• During the pandemic, the company had to close its stores and file for Chapter 11 bankruptcy relief.

The candy retailer IT'SUGAR is bouncing back with new large format stores, pop-ups, and a greater focus on high-traffic locations after struggling to stay open over the pandemic.

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Since opening the first IT'SUGAR location on the Atlantic City boardwalk, the company has expanded its presence to 100 locations across the US and Canada.

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In August, IT'SUGAR opened a brick-and-mortar location in Time Square to add to its portfolio. We toured the IT'SUGAR New York City location to see how its expansion plan is panning out and what the in-store experience is really like.

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The Time Square store is over 20,000 square feet, spans two floors, and is complete with New York-specific design details.

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Along with offering almost any kind of candy customers can think of, IT'SUGAR also has licensing deals with companies that allow them to sell merchandise, including stuffed animals and T-shirts, from popular candy brands like Sour Patch Kids and Reese's.

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Jeff Rubin, the company's founder and CEO, founded IT'SUGAR in 2006. Rubin broke into the candy industry by working for FAO Schwarz on a concept called FAO Schweetz and for the candy brand Dylan's Candy Bar.

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Then, in 2017, BBX Capital, a Florida-based investment and holding company, bought IT'SUGAR for approximately $57 million. "All of this expansion and success of late have been attributable to the purchase by BBX Capital," Rubin said in an interview with Insider.

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Source: BBX Capital

However, IT'SUGAR hasn't always been the picture of success. During the pandemic, as tourism halted and in-person shopping and entertainment experiences ceased to operate, the candy company plunged into bankruptcy, filing for Chapter 11 relief in September 2020.

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"About 85 percent of our traffic catered off of tourism, movie theaters, conventions, cheerleading conferences, bowling alleys, arcades, restaurants, bars, and nightclubs — all the things that shut down," Rubin said.

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IT'SUGAR has since emerged from bankruptcy with a reorganization plan funded by the company's cash reserves and a secured exit credit facility of up to $13 million. With its return, the company has a new expansion plan reliant on targeting high-traffic areas and catering to customers looking for retail shopping experiences.

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Source: South Florida Business Journal

According to the National Confectioners Association's 2022 "State of Treating" report, candy sales grew by 11 percent in 2021 compared to the previous year. Confections sales hit nearly $37 billion in 2021 and are projected to surpass that number by almost $45 billion by 2026.

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Source: National Confectioners Association

Featured in the store were mix-and-match stations that customers could use to buy an array of their favorite sweet treats.

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There was also an "As Seen on TikTok" display with candy that has been featured on the social media platform.

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A large mural was plastered on one wall, mirroring the company's new model, focusing on opening short-term leases in high tourism areas like Time Square, Union Square, San Francisco; and Michigan Avenue in Chicago.

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"We have a mix of pop-ups and permanent department stores. The pop-up locations were targeted for the high streets, and it allowed us to really test the market to see how these would do with short-term favorable rents," Rubin said.

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IT'SUGAR previously had two store formats — 2,500 square feet and 5,000 square feet— but has since revealed large format stores ranging from 15,000 to 25,000 square feet after recovering from the pandemic.

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The smaller locations, between 2,500 and 3,000 square feet, are in a combination of tourist and retail markets, while the rest of the stores in larger formats are located in high tourist areas. Approximately 20 percent of IT'SUGAR stores are in mall or outlet mall venues, according to Rubin.

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Permanent IT'SUGAR locations include one inside the American Dream mall in New Jersey, which opened in 2019, and one in the Ala Moana Center in Honolulu, Hawaii, in 2021.

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Plans to open more store locations are also in the works, including a permanent lease for a 20,000-square-foot store in Miami and an approximately 25,000-square-foot lease on Fisherman's Wharf in San Francisco that is set to open next spring, Rubin told Insider.

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Opening a mix of short-term and permanent leases has been "a really good success, and it allowed us to understand what we could do in sales to later let us know what we could do in rent, so it was a low-risk way of testing the markets that were being left vacant as so many retailers were getting out of the high-street locations," Rubin said.

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In addition to selling candy popularized in the US, IT'SUGAR is also partnering with international brands. One of those products is Chupa Chups lollipops from Spain, which have gained notoriety as one of the most popular lollipop brands in the world.

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IT'SUGAR stores currently stock shelves with candy from Mexico, Asia, and parts of Europe.

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The store also had a section dedicated to vintage candy, such as Charleston Chews and Now or Later.

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While the IT'SUGAR expansion plan is still in its experimental phase, the company aims to continue to open physical locations in the US and in Canada after the company successfully opened a store in Alberta in August 2021. "The Time Square location is meeting to exceed our plan and we're very happy with the results. Happy enough to continue to keep opening stores," Rubin said.

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