Typhoo Tea, a time-honored brand, has entered administration amid significant financial setbacks.
- After celebrating its 120th anniversary, Typhoo Tea has experienced a sharp decline in sales and profitability.
- Revenue decreased from £33.67m in FY 2022 to £25.33m, and operating losses escalated substantially.
- A team of administrators from Kroll has been appointed to facilitate a potential sale of the brand’s business and assets.
- A series of unfortunate events, including a factory break-in, have further complicated Typhoo’s operational and financial situation.
Typhoo Tea, a brand with a rich history, is facing severe financial difficulties, culminating in its recent decision to appoint administrators. After marking its 120th anniversary last year, the company has been grappling with declining sales and profits. Its revenue fell to £25.33m from £33.67m in the previous fiscal year 2022, while operating losses have ballooned from £-5m to a staggering £-31.651m.
In response to these financial challenges, Typhoo Tea has engaged Phil Dakin, Janet Burt, and Benjamin Wiles of Kroll as administrators. Their task is to explore the possibility of selling the business and its assets. Reports suggest Supreme Imports plc, a major distributor in the UK, is the leading candidate in acquiring the brand.
Kroll issued a statement confirming the exploration of a sale, emphasizing that the administration process is intended to protect Typhoo Tea as the business navigates these turbulent waters. Approximately 20 jobs are currently at stake, following a significant staff reduction that occurred when the company shuttered its Moreton factory in Merseyside last year.
The factory closure was exacerbated by an incident in August when a group of trespassers broke in, causing extensive damage to the site and its machinery. This event not only rendered stock unusable but also delayed the factory’s sale, which did not finalize until June of this year.
The financial repercussions of the trespassing incident have been substantial, with a £4.72m insurance claim filed and £24.1m in exceptional costs recorded. Despite a robust demand for its products, a shortage of tea paper further impaired Typhoo’s ability to fulfill orders, contributing to its financial woes.
Following these setbacks, Typhoo Tea relocated its registered address from Birkenhead to Bristol. The company has been under the majority ownership of Zetland Capital since 2021, adding another layer to its complex financial landscape.
Typhoo Tea’s current struggles highlight the challenging environment faced by heritage brands in today’s market.
