PhillyDeals: Hershey's online candy store shutting down this month

Remember when everyone was going to sell everything online?

"Brick-and-mortar" stores would close, and we'd all do business by e-mail, credit card number, and UPS?

Hershey Co., for one, has clicked off the virtual-shopping era.

"Hershey's Gifts will be closing its catalog and Web business effective July 31, 2009," after a 25-percent-off closeout sale, the Hershey's Web site told longtime mail-order chocolate-giver Buzz Griffin of Haddon Township and others who went online to price gifts yesterday.

Why is Hershey going dark? "The present business model is not sustainable," company spokesman Kirk Saville told me. It costs too much, compared with old-fashioned ways of selling sweets.

Hershey "will continue to evaluate all options in e-commerce, including strategic partnership and licensing agreements," Saville added. But for now, you'll have to buy Hershey's in the candy aisle, or "direct" at the company's stores in Hershey, New York, and Chicago.

I asked professional shopper and retail stock analyst Holly Guthrie at Boenning & Scattergood Inc. in West Conshohocken if there's a lot of this pullback happening in the online-retail world.

There is, she told me. Two reasons:

"One, state-taxing issues," she said. Cash-strapped California, North Carolina, and other states are belatedly pressing to collect taxes on Internet sales, and Guthrie's collected news reports saying Amazon.com Inc. and Overstock.com Inc. have warned they will stop shipping there before they'll pay to help governments collect.

"Two, many retailers have had to offer free shipping during peak selling periods, which really hurts [profit] margins," she added.

Online was supposed to transform retail, and it did, to a point. But as with banking, news, and other services, the Web hasn't replaced reality. It just gave companies one more costly distribution system to pay for. Until they won't.

The Main Line's Charles "Ed" Haldeman Jr. is the Freddie Mac board's choice for chief executive officer at the very troubled, taxpayer-backed home-loan finance company, the Wall Street Journal reports.

He was on the golf course when I called his Haverford home. And Freddie wouldn't talk either.

Until his recent retirement, Haldeman spent his working days for the last seven years in Boston running mutual fund giant Putnam Investments. Before that he was boss at Lincoln National Corp.'s Delaware Investments (2000-02) and a stock-picker, partner, and parent-firm executive at Philadelphia value investor Cooke & Bieler Inc. (1974-2000).

"It's been pretty wonderful to watch his career path," said John Medveckis, partner at Cooke & Bieler. "He started as an analyst, and focused on investment management, [picking] well-managed companies."

And he has become a turnaround specialist, especially since stabilizing Putnam. Which Freddie Mac is going to need, even if Haldeman turns out to be its final chief executive, as Congress and President Obama weigh the stricken company's fate.

Debra Kahn, executive director of Delaware Valley Grantmakers, says things aren't as bad for charities as I wrote in yesterday's column.

She caught an error. Yes, nonprofit foundation assets were down 26 percent in the Commonfund Institute survey for 2008. But they were up (not down, as I reported) 10 percent in 2007. They also rose 14 percent in 2006 - which means, Kahn said, that if you stop the clock at three years, charitable investment returns were really "a wash."

Why does three years matter? "When many foundations determine what their payout is going to be, they look at a three-year moving average," Kahn told me. Taking that longer view, nonprofit groups broke even in 2006-08, and can afford to justify "maintaining or increasing their giving."

I ran that by Commonfund executive director William Jarvis. He was less comforting.

"As you know, if you do the math, you need to come back more than you lost, in order to get to the same place again," Jarvis told me.

"It'll be a tough climb."