Behind the shelves of candy, a darker side to London's mysterious American candy stores

LONDON — No. 363 Oxford St. is a building steeped in British history and culture. For 70 years it was the flagship store of venerated entertainment retailer HMV, helping the Beatles launch their first major record deal in 1962.

Today this landmark is home to Candy World, one of more than two dozen shabby American-themed stores selling candy and trinkets whose recent mysterious explosion on one of London’s most popular shopping thoroughfares has confounded officials and property experts.

Their spread exemplifies the decay of Oxford Street. Gutted by online retail, sky-high business taxes and pandemic lockdowns, it is today suspected of being a haven for criminality perpetrated in plain sight, with the local authority investigating some of the stores in connection with a range of offenses including tax avoidance and selling counterfeit chocolate, watches and vapes.

Telling this story means delving behind the shelves of Jolly Ranchers and Twinkies and into the web of commercial property ownership that spans Hong Kong investment firms and London’s giant real estate companies. It requires negotiating Britain’s opaque system of business and leaseholder registration, which financial experts say enables shady activity to go unchecked.

And yet there is much that perplexes industry figures. Many agree something is not right — but they can’t work out exactly what it is.

“These stores have come up a lot in my discussions with people in the tax evasion and money laundering world,” said Dan Neidle, former head of tax at international law firm Clifford Chance. “They’re all a bit mystified as to what they’re doing because it doesn’t really make sense.”

From hangings to Hershey’s

For 650 years, crowds swarmed Oxford Street to heckle convicts being carted from the prison at one end to the gallows at the other.

The mass public hangings stopped in the 1780s, and soon the street reinvented itself as a shopping destination. By the 1860s, it had begun to redefine the retail experience itself. Its department stores such as Selfridges, which opened in 1909, became attractions in their own right.

The wide sidewalks have always been rough around the edges, peppered with tacky souvenirs and placard-waving preachers of doom.

But today it faces unprecedented crisis, its stores struggling to compete with online retail while coping with crippling overheads — and that was before Covid-19. Mega brands like Debenhams and Topshop have gone, leaving 20% of the street empty, according to Stuart Machin, chief executive of beloved upmarket retailer Marks & Spencer, who wrote in the Telegraph newspaper in June that Oxford Street risked becoming a “dinosaur district destined for extinction.”

Into that void have stepped the candy stores.

American Candy Shop Interior (Richard Baker / In Pictures via Getty Images file)
American Candy Shop Interior (Richard Baker / In Pictures via Getty Images file)

They are all remarkably similar: pounding electronic music; paneled ceilings and harsh strip lights; weirdly few customers; and thousands of highly priced American candies stacked floor to ceiling.

That’s not all they share. Westminster City Council, the local authority, is investigating around 30 in connection with alleged business tax avoidance totaling 7.9 million pounds ($9.5 million).

They are “far from regular and legitimate businesses,” with too few customers to cover rents, a June 13 council statement said. Its officials raided three stores, seizing 100,000 pounds of counterfeit Wonka bars, vapes and Rolex watches. The premises could be a front to “possibly commit other offenses,” the statement added. The council declined to elaborate on the investigation when NBC News contacted it.

Candy World, with its billboard featuring the Statue of Liberty holding a chocolate bar, is among those under investigation, according to shopfront staff. The council has declined to name any of the two dozen-plus stores it’s looking into.

It popped up earlier this year in the old flagship store of HMV, short for His Master’s Voice, which opened in 1921. Forty years later, Beatles manager Brian Epstein cut the band’s disks here. The audio technician was so impressed he called George Martin, who signed them to his label.

The HMV flagship store closed in 2019 after the company became insolvent and was sold to Canadian firm Sunrise Records. Today, its escalators sit idle behind rotating racks of Candy World souvenirs.

On a recent visit, staff shrugged when asked if a manager was available to comment on the raids. Another intervened, a man with graying hair and a beard, a black T-shirt, black jeans and AirPods.

“No comment,” said Abdul, declining to give his full name or job title. “We are not speaking to anyone else after the lies previously printed in the media,” referring to the council’s statement.

He did confirm Candy World was one of those raided, with around 2,000 pounds’ worth of candy confiscated. It was also visited by investigators from Her Majesty’s Revenue and Customs, Britain’s tax authority, he said, adding he doesn’t know details. HMRC declined to comment, citing confidentiality laws.

In all, the council says it’s short almost 8 million pounds in unpaid taxes across the whole street. Landlords have to pay these if their buildings are empty. So they often rent out the space to the first applicant — regardless of its quality or legitimacy, according to the council.

Actually collecting these taxes from the candy stores is difficult because some give “shell-company names that quickly dissolve,” the council said. London has become so notorious for its impenetrable network of anonymous owners and shell companies that it’s earned the nickname “the laundromat.”

So where did these candy stores come from — and why?

“The problem is, we don’t know,” council leader Adam Hug wrote in a Guardian op-ed last month.

‘Somebody just played us’

On his family’s six-day London vacation, Øystein Eide’s daughter hadn’t stopped bugging him to visit one of the stores near their hotel.

What struck him inside Candy World was that hardly any shelves had price tags. He soon saw why: The Cheetos, lollipop and chewing gum picked up by his daughter, Aria, 9, came to 30 pounds ($35).

“As soon as we left the store I said to my daughter, ‘Somebody has just played us,’” said Eide, 43, a cement-factory manager from Kjøpsvik, Norway. “This is a tourist trap — they just want to suck money out of people.”

American Candy Shop In London (Mike Kemp / In Pictures via Getty Images file)
American Candy Shop In London (Mike Kemp / In Pictures via Getty Images file)

NBC News interviewed more than a dozen customers of these stores who had similar stories. Many also reported that their candy was past its “best before” date.

Getting answers from the shops’ owners isn’t easy. It’s even difficult to nail down who owns Candy World to ask them about authorities’ allegations and consumer rage.

The company’s official name is Lawi Ltd., according to scant public records information confirmed by its lawyers. Lawi has moved its registered address three times in as many months, starting at a former Adidas store, where in 2021 it ran American Candy Land, and finally earlier this month to the northwest London suburb of Harrow.

This address is a peeling postwar apartment block, with car-garage stickers plastering its grimy buzzer and a busted front door that swings open on its own. The entrance is squeezed between a realtor and a peri peri chicken restaurant. Inside, a polite woman answered an unmarked apartment door and revealed this is the offices of Vinnyross and Co. — Lawi’s lawyers.

She said to call back later when the manager is in. When NBC News did so, the manager said, “Yes, they are the candy company, but we don’t want anything to do with this,” before hanging up.

Down the road in Greenford, another northwest suburb, NBC News cross-referenced public records to find the home of Lawi’s director, Ahmad Kader. Answering the door in shorts and a baseball cap was a person who said their name was “Ali,” Kader’s cousin. Kader was on vacation, he added — destination and return date unknown.

NBC News has not received a response to questions handed to Ali, the lawyers or storefront staff.

The Candy World building itself is technically owned by the City of London, a medieval authority covering the capital’s financial district, accused by critics of being opaque and unaccountable. In 1923, it sold the property on a 2,000-year lease, effectively relinquishing all responsibility. In 2008, that leasehold was bought for 40 million pounds by a Hong Kong firm called Glory Step Investments, domiciled in the British Virgin Islands, a tax haven.

By cross-referencing Hong Kong public records with other public documents, NBC News found its three directors are relatives of Shek Kam Fai, a billionaire gaming parlor tycoon known as “the king of mahjong parlors.” There is no evidence Shek or his family has a financial interest in the candy stores.

Buying the Oxford Street building was a shrewd investment. The family acquired this prime chunk of Western downtown real estate just when the market was in its post-financial-crisis nadir. Central London commercial real estate has since appreciated 117%, according to MSCI, a financial company headquartered in New York.

Glory Step Investments’ lawyers have not responded to a request for comment on whether it is aware of the allegations against Candy World, or whether it deals with the store directly.

‘Just Google “fake Wonka bars”’

It’s unclear how much involvement Glory Step Investments has with the building.

Its leasing agent, global property giant Savills, has advised the Hong Kong firm “of the concerns” about the candy stores, Savills spokesperson Victoria Buchanan said in an email, adding that Savills is “seeking a long-term tenant.”

However, both Savills and Montagu Evans, the building’s managing agent, said they don’t deal with Candy World itself. It’s unlikely Glory Step Investments would either; there are usually middlemen in these chains, but those don’t show up on the register if the contract is less than seven years, according to the Land Registry, the government’s official property register.

The landlord-sympathetic view is that taxes are so high if these buildings are left empty that owners can’t hang around waiting for a better-quality tenant. Even if that were true, it still leaves unanswered questions. Namely, what’s in it for the candy companies themselves?

“It’s pretty poor-quality money laundering, if that’s what it is,” said Neidle, formerly of Clifford Chance and now founder of the nonprofit Tax Policy Associates Ltd. For one, the stores always seem devoid of actual customers, and criminal enterprises “don’t tend to launder money right on a high street in public view,” he said.

The council has never publicly said it’s investigating the stores for money laundering. One of the allegations it has leveled directly, however, is that of selling fake Wonka bars.

Italian confectioner Ferrero owns that brand but doesn’t currently produce them. The bars that flooded Oxford Street were instead wrapped in a label that’s sold online as party favors on Amazon and Etsy. Ferrero did not return a request for comment on the fact that counterfeit chocolate under their brand was being sold.

Wrapping cheap chocolate in Wonka labels was the M.O. of Nathan Bennett, 33, a candy store owner from Barnsley, northern England. He pleaded guilty and was prosecuted earlier this year, given a suspended prison sentence and made to pay 3,700 pounds.

Loren Phillips, an officer with Westminster Council, stands over a haul of counterfeit Wonka bars seized on Oxford Street. (Westminster Council)
Loren Phillips, an officer with Westminster Council, stands over a haul of counterfeit Wonka bars seized on Oxford Street. (Westminster Council)

Two squares contained enough hazelnut to trigger a serious allergic reaction, but this was not on the labels, Barnsley Council said in a statement.

“Just Google ‘fake Wonka bars,’” a remorseful Bennett told NBC News by phone. “Plenty of people are doing this.”

He reckoned the boom is an attempt to capitalize on viral candy-related videos on TikTok (like the global stardom of Binley Mega Chippy). Others think it was a wily pivot by souvenir stores that were forced to shutter during lockdown because they didn’t sell “essential” food.

“All the souvenir shops turned to candy,” said Roshk Farz, 25, assistant manager of American Candy Shop up the street. But he said he thinks this sugary market has reached saturation.

“Soon everyone will be back to selling souvenirs,” he said. “There is just too much candy.”

Alexander Smith and Caroline Radnofsky reported from London, and Rhoda Kwan reported from Taipei, Taiwan.