The Sunday Times May 29, 2022 7
BUSINESS
Michigan, after reports of
children falling ill or dying
after being fed formula from
the site.
Robert Cleveland, head of
Mead Johnson’s nutrition
business in the US and
Europe, said the company
had a “unique responsibility”
to step up and meet the
demand from increasingly
desperate parents.
The crisis in America began
in February when Abbott
closed its factory in Sturgis
after an investigation began
when four babies developed
bacterial infections, and two
died. Abbott, which had a 40
per cent share of the market
prior to the crisis, has
maintained that there was no
link between its formula and
the illnesses.
The White House has
stepped in with emergency
legislation to boost
production, including
invoking the Defence
Production Act to prioritise
supply of raw materials, and
has authorised flights to
import supply from overseas.
Kendal Nutricare, a family-
owned business in the LakeDespite having a population
of just under 6,000, the town
of Zeeland, in Michigan, is
playing a huge role in tackling
one of the biggest challenges
facing parents in America
today.
Staff at the Mead Johnson
factory there have been
working round the clock to
increase production of baby
formula, as the US battles to
recover from a crisis that has
left parents facing empty
shelves and struggling to
secure enough supply to keep
babies fed.
For Mead Johnson’s owner,
the FTSE 100 consumer giant
Reckitt, the baby formula
crisis in America is the
second time in two years it
has responded to a disaster
beyond its control. First, its
global production lines were
ramped up to meet the
rocketing demand for Dettol
and Lysol disinfectant driven
by Covid. Now, factories in
the US have increased
production by 35 per cent in a
battle to fill shelves after its
competitor, Abbott, was
forced to recall baby milk and
close its factory in Sturgis,He just
wants to
be seen
to be
doing
deals
£1.9bn
THG’s valuation£160m
Candy’s flat at
One Hyde Park£14m
Cash burnt at
Crowdmix7
Nick Candy made millions from One Hyde
Park, but far-fetched bids for Chelsea and
THG have baffled the City. By Oliver Shah
The toytown
tycoon who’s
desperate
to play with
the big boys
Nick Candy, with
his wife Holly
Valance, the soap
actress, mixes
with stars and is
an Olympic level
name-dropperalleged that Nick was, in effect, a 50 per
cent owner of CPC and that this was “hid-
den for tax purposes”. He claimed that
Nick’s £160 million two-floor penthouse
at One Hyde Park and a 200-year-old,
Grade II-listed mansion in Chelsea worth
£85 million were secret dividends paid in
return for his involvement with CPC. The
Candys denied this; Nick said Christian
had given him more than £250 million of
assets out of “natural love and affection”.
Holyoake, who was suing over a
£12 million loan the Candys had given
him to develop a site in Victoria, lost the
case. But the judge said that none of the
protagonists emerged with much credit.
“Each has been shown to have been will-
ing to lie when they consider their com-
mercial interests justify them doing so,”
he said.
One Hyde Park turned out to be the last
big project the brothers did together.
Less than three years after the Holyoake
case ended, Christian and his wife, Emily,
moved their family to the Bahamas.
Christian was said to be “sick of the UK”.
Nick Candy had sometimes dabbled in
listed companies, trading shares in the
property developer Minerva, which was
taken over in 2011. In 2014, he turned his
attention to the fashionable tech sector,
investing in the podcasting platformspending by the founders. Candy Ven-
tures says it is “a multi-stage investment
firm backing outstanding entrepreneurs
building transformational products”,
and claims it has funded more than 25
businesses. But because it is based in Lux-
embourg, its financial firepower and per-
formance are difficult to ascertain.
Few property industry insiders believe
that Candy is a billionaire, as is some-
times claimed. He and Christian have not
appeared in The Sunday Times Rich List
since 2008; the compilers have not been
comfortable that an accurate figure can
be put on their wealth. Even Nick’s pent-
house at One Hyde Park is carrying an
£80 million mortgage. Candy has report-
edly been trying to sell the property for
£175 million.
In this context, his bids for Chelsea and
THG appear far-fetched. Candy has dis-
closed that he has a £1.4 million stake in
THG, meaning that he may benefit if
Moulding’s empire is taken private by
another suitor, a consortium led by the
buyout firm Belerion Capital.
The disconnect between his ambitions
and his circumstances has prompted eye-
rolling, even among his friends. “Nick
loves a PR opportunity,” said one. “For
good, for bad, he doesn’t really care. But
he hasn’t got the money.”Audioboom and joining the board as a
non-executive the following year.
He also backed private tech start-ups.
Candy Ventures was the biggest investor
in Crowdmix, a music-based social net-
work that went bust in 2016 after burning
through £14 million of funding without
even going live with its app. Crowdmix
spent extravagantly on offices in London
and Los Angeles — the one near Old Street
featured a bespoke reception desk in the
shape of a ghetto blaster. Staff partied in
Amsterdam and Texas shortly before it
struggled to pay their salaries. After
Crowdmix fell into administration in July
2016, Candy bought it back.B
lippar followed a similar trajectory.
Candy was the biggest shareholder
in the augmented reality start-up,
founded by the entrepreneur
Ambarish Mitra, dubbed the real-
life Slumdog Millionaire for his colourful
— and sometimes exaggerated — back-
story. At one point, Blippar claimed to
have turned down a $1.5 billion buyout
offer, giving it “unicorn” valuation status.
But it too went bust, in December 2018.
Candy Ventures has had other mis-
haps, including an investment in the fash-
ion brand Ralph & Russo, which again
went under amid allegations of lavishT
he gym-loving founder of
THG, formerly The Hut
Group, will forever be associ-
ated with Instagram pictures
of shirtless partying. The
now-infamous snaps of Matt
Moulding and his sculpted
torso were taken on a yacht
owned by Sir Tom Hunter, the
Scottish retail tycoon who
was an early backer of THG.
Hunter is tangentially involved in
another incident that is shining a spot-
light on the beauty and e-commerce
group. Nick Candy, one half of the prop-
erty duo that developed the luxury One
Hyde Park residential scheme in Knights-
bridge, popped up with a stock exchange
statement this month saying he was con-
sidering a takeover bid for THG, which
has a market value of £1.9 billion.
Candy, 49, and Hunter, 61, are good
friends: they share an office near Gros-
venor Square in Mayfair and form part of
a social set that mixes in ritzy parts of
London and the south of France.
That connection is the only thing
about Candy’s interest in THG that makes
sense. He has made a series of disastrous
investments in tech start-ups but has no
record of big acquisitions. Bankers doubt
that his Candy Ventures vehicle, which is
being advised by Bank of America Merrill
Lynch, has the equity to pull off a move
on anything near the scale of THG. “I get
the impression he just wants to be seen to
be doing very big corporate deals,” said
one. “He’s just trying to up his profile.”
THG isn’t the first example. In October
2019, Candy Ventures, advised by Deut-
sche Bank, said out of the blue that it was
considering a bid for the property com-
pany Capital & Counties, then valued at
about £2.1 billion. It withdrew its interest
less than a month later. And this March,
claiming to have financing from South
Korea, Candy made an attempt to buy
Chelsea FC from the sanctioned oligarch
Roman Abramovich. He said he had been
going to Stamford Bridge since the age of
four and boasted that “John Terry and
Frank Lampard are friends of mine”. His
Blue Football Consortium failed to make
the shortlist of bidders drawn up by
Abramovich’s advisers at Raine Group.
Candy, who is married to the former
Neighbours actress Holly Valance, is
known to be an Olympic-level name-
dropper. He socialises with the comedi-
ans Jimmy Carr and David Walliams, and
was photographed last month meeting
Donald Trump in Florida. He bankrolled
and promoted Shaun Bailey’s Tory Lon-
don mayoral bid, which turned sour as
Bailey was comfortably beaten by
Labour’s Sadiq Khan last May — then was
forced to resign as chairman of the Lon-
don Assembly’s police and crime com-
mittee when a picture emerged showinghim and Candy at a Covid lockdown-
breaching party in December 2020.
He has dabbled in tech, putting money
into Crowdmix, a music-streaming
start-up, Blippar, a much-hyped aug-
mented reality venture and Ralph &
Russo, the couture brand that made the
Duchess of Sussex’s wedding dress. All
three went bust (Candy bought Crowd-
mix and Blippar out of administration).
His interest in Chelsea and THG sug-
gests he wants to be seen in a more seri-
ous light. But Candy’s efforts are dogged
by two questions. Having parted ways (in
a business sense) from his brother Chris-
tian, does he have the brain power to
compete at that level alone? And, more
importantly, does he have the money?O
ne Hyde Park’s launch in 2011
marked the beginning of London’s
post-crisis property boom in
appropriate style. Five thousand
gold balloons were released from
the roof. Guests, including Bernie Eccle-
stone and Gary Lineker, nibbled canapés
made by Heston Blumenthal, whose Din-
ner restaurant is part of the adjoining
Mandarin Oriental hotel.
The Candys, blokeish public school-
boys from Surrey, had started out on
their property careers with a £6,000 loan
from their grandmother 16 years earlier.
Now they wanted to redefine luxury real
estate. With cash from Qatar’s then-for-
eign minister Hamad bin Jassim bin Jaber
al-Thani (“HBJ”) and architecture from
Graham Stirk of Rogers Stirk Harbour +
Partners, they built three glass-and-steel
towers opposite Harvey Nichols.
A month after the party, the The Sun-
day Times’ waspish restaurant critic AA
Gill described it as “a hutch for the
improbably rich ... the most pathetically
unimaginative address in the city, a self-
made ghetto of naff and gilt”. But Nick
later claimed they sold £750 million
worth of flats while it was still “a hole in
the ground”. One alone went for a
reported £140 million in 2014. The 86
units eventually raised a total of about
£2 billion from buyers including Temur
Akhmedov, son of the Russian oligarch
Farkhad, and the Cypriot billionaire
Polys Polys Haji-Ioannou, brother of the
easyJet founder Stelios. It was not clear
how the resulting profits were divided
between the brothers and HBJ.
Christian, then a tax exile based in
Monaco, handled the development and
sale of properties through his Guernsey-
based CPC Group. Nick, who stayed in the
UK, was in charge of interior decor and
project management. This arrangement
meant that almost all the proceeds from
One Hyde Park flowed offshore. It was
questioned in a savage High Court clash
between the Candys and a former busi-
ness associate in 2017. Mark HolyoakeMADE IN MAYFAIR
REPLICA
CHELSEA STADIUM
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AGES 3+WARNING
CHOKING HAZARDILLUSTRATION: TONY BELLReckitt to the
rescue in US
baby milk
emergency
Having faced the Covid rush on Dettol,
the British giant’s factories are flat out
again in another health crisis,
Sabah Meddings reports
supplies, which are expected
to be delivered via air freight
arranged by the US military.
From there, they will be
distributed to warehouses
across the east and west
coasts of America, and
delivered to retailers or
directly to consumers.
“Every retailer in America
wants formula right now, so
we need to prioritise.”
Part of the supply problem
is due to the complex process
required to produce baby
milk. In Kendal, liquid cow
and goat milk is transformedParents in America are
struggling to find enough
baby formulaimports, to about 2.4 million
cans between January and
May. There have been calls
for the White House to
encourage competition and
lower regulatory barriers to
imports.
Unsurprisingly, for a
company that has a 40 per
cent market share in normal
times and 55 per cent share
during the crisis, Mead
Johnson’s Cleveland takes a
different view: “Making infant
formula at scale is a complex
and difficult thing to do. As
long as it’s done safely, the US
has plenty of supply.”
Reckitt, which is
reportedly seeking to sell
Mead Johnson, is expected to
take a larger share of the
market in future. Analysts at
Barclays expect it to retain
between 20 to 25 per cent of
recent share gains.
For now, Cleveland is
focused on filling shelves.
That means sending out
trucks before they’re full to
ensure quicker supply, paying
staff overtime and keeping
plants open 24-7. “We’re not
stopping to think about what
it costs us,” he added.into powdered formula in a
process that takes about two
days. For Kendal, the
increased demand comes as
its sales increased from just
under £2 million a year
before Covid, to about
£30 million today.
For Reckitt, the increased
demand has pushed shares
up more than 6 per cent,
adding more than £2 billion
to its market value — which
analysts at Jefferies suggest
could imply a £200 million
bump to Reckitt’s core
earnings.
The company, led by chief
executive Laxman
Narasimhan, is hoping to
further add to supplies in the
US through imports from
plants in Mexico and
Singapore, and is awaiting
FDA permission.
However, in the long term,
the crisis could pave the way
for greater competition in the
US. Nestlé is sending Gerber
infant formula from the
Netherlands and the
Alfamino brand from
Switzerland to the US.
Danone’s Nutricia division
has more than tripled itsGETTY IMAGESDistrict, which makes
Kendamil formula, won
approval from America’s
Food and Drug
Administration to export
about two million cans to the
US in the coming months —
enough for 65,000 families
between now and November.
Will McMahon,
commercial director, said its
factory was working almost
round the clock to increase