Typhoo Tea, under new ownership, aims to recover from financial struggles.
- Vape firm Supreme acquired Typhoo Tea for £10.2m after its administration.
- Typhoo faced a sales decline and significant financial losses in 2023.
- The company’s debt reached nearly £70m due to previous ownership.
- Supreme plans to diversify and explore new markets with Typhoo.
Typhoo Tea, one of the UK’s oldest tea brands, has entered a new chapter under its new owner, Supreme. The acquisition, valued at £10.2 million, comes in the wake of Typhoo’s recent financial turmoil, which saw the company fall into administration. Supreme, a firm primarily known for its involvement in the vape industry, purchased Typhoo as part of a strategy to expand its footprint beyond vaping products.
The past year has been particularly challenging for Typhoo, with sales plummeting by 26% to £25 million, compared to £34 million in the previous year. Financial losses were staggering, climbing to £38 million from the previous year’s £9.7 million. This significant financial decline was compounded by debt totaling nearly £70 million, a burden attributed to its previous owners, the private equity firm Zetland Capital.
Sandy Chadha, the CEO of Supreme, articulated the challenges facing Typhoo, stating that the extensive debt under previous management was unsustainable. Chadha emphasized the difficulty of supporting over £25 million in debt without generating cash flow, underscoring the precarious position the brand was in prior to Supreme’s acquisition.
Supreme’s acquisition is not just about stabilizing Typhoo’s financials but also aims to leverage the brand to broaden its own market reach. The company foresees potential synergies by incorporating Typhoo’s offerings into its diverse product lines. Supreme’s annualized sales from non-vape categories are expected to exceed £120 million, indicating a strategic diversification.
Furthermore, Supreme sees growth potential in the iced tea market, which Chadha notes is on the rise even as the traditional tea market declines. The company is considering this trend as a possible avenue for innovation under the Typhoo brand, hinting at a future where Typhoo could expand into new beverage categories.
Supreme’s acquisition of Typhoo Tea marks a strategic move to revitalize the brand and explore broader market opportunities.
