Kathleen King lost almost everything.
After successfully building up her Southampton, New York, cookie business for two decades, disaster struck. Her two partners in Kathleen’s Bake Shop didn’t hold up their end of a business arrangement. As King puts it, she was naive and the partners refused to pay her back.
“And that combination led me to losing my company and my name,” she said.
From that low point, King rebuilt her entire operation to even greater success. In 2014, she sold a majority stake of what became Tate’s Bake Shop to a private equity firm for $100 million.
King spoke about the initial success, the following disastrous lawsuit and the eventual meteoric revival of her cookie business during a Hampton Roads Chamber Leadership Series event Oct. 10.
Even before she started her business at age 21, King said she loved baking cookies and experiencing the joy her cooking brought to people. At 11, she baked her first batch of cookies at her family’s farm in Southampton.
“It never seemed young to me, to want to do that kind of thing and take on that kind of responsibility,” she said. On the farm, she said she began working and helping out with chores as soon as she could walk.
After two years of college, King said her mother pointed her to an open retail spot downtown, and her business was born. After outgrowing her rental spaceshe expanded into a larger location and changed the name to Kathleen’s Bake Shop to reflect the variety of baked goods she sold.
Eventually, through that same hard work, King said her cookies became a national brand.
Years later, after she said the partners began stiffing her on payments, King took the pair to court. As part of the eventual settlement, assets were divided and King lost the name. She also inherited around $200,000 of $600,000 total debt.
“I had, really, not a penny left to my name, because I had spent it all on legal fees,” she said.
King set about rebuilding her business “without even a day’s break,” naming it Tate’s Bake Shop in honor of her father.
With the help of the Southampton, N.Y., community, King said she rallied back and brought her business out of debt. This time, she set a clear goal: she wanted to sell her business by the time she was 55 years old.
She said she learned to trust her workers more and felt less of a need to manage all aspects of the business.
“Now, I had to think of my exit strategy,” King said.
In that endeavor, she was successful beyond her wildest dreams. After the 2014 sale, King stayed on in a smaller capacity, creating new recipes and serving on the company board.
The private equity firm sold Tate’s to Mondelez International, owners of brands like Nabisco and Toblerone, for more than $500 million in 2018.
King offered a few pieces of business advice to the Norfolk audience. She told them to be passionate, but not so attached that they, say, refuse to discontinue a failing product.
She learned to make resolute decisions and to not agonize before making those hard choices. She grew from her challenges.
“The only thing different between Kathleen’s and Tate’s was me,” she said.
After retiring, King said she didn’t really get much joy from her wealth and put most of her earnings from the Tate’s sale into a charitable fund. She supports causes like i-tri, a triathlon program for middle school girls, and the Peconic Land Trust, a conservation group for Long Island farms and other spaces.
Attendee Mark Johnson, a Norfolk SunTrust Bank vice president, has been friends with King since his childhood. He said he remembered wandering over to her first bake shop after school one day as a preteen on Long Island.
“Wherever you go, you could smell good stuff,” Johnson said with a chuckle. Through their friendship, he said he was struck by just how hard King worked to achieve her dreams and goals.
Trevor Metcalfe, 757-222-5345, trevor.metcalfe@insidebiz.com.
