Drinkware supplier Tervis (PPAI 110960, Standard-Plus), known for its insulated tumblers, has filed for Chapter 11 bankruptcy.
The filing states that the North Venice, Florida-based company, which doesn’t disclose annual revenue figures, has total assets and liabilities ranging from $10 to $50 million, Business Observer reported.
“This difficult business decision was one that we made in order to preserve the company’s legacy and better the company for the future to ensure its continued existence and operational success in the decades to come,” said Tervis Chairman Rogan Donelly.
Koozie Group CEO Pierre Montaubin tells PPAI Media that, despite the bankruptcy filing, “it’s business as usual with Tervis.”
“We’ve been in close contact with them and will support them through this next phase,” Montaubin says. “Tervis is a fantastic brand with a great legacy, and we expect its products to continue to perform well in the promo market. ”
What Caused Tervis’ Bankruptcy?
Executives have cited several factors for the bankruptcy:
- A drop in consumer spending and a rise in operating expenses due to inflation.
- A post-COVID spike was followed by a sharp decline in e-commerce sales.
- Retail locations that have failed to recover from the pandemic.
- The closure of its distribution facility in order to sublease the property, “which has proven difficult.”
- A “burdensome” lingering lawsuit filed in 2018 by a previous supplier.
Another major challenge for Tervis has been adapting to the stainless-steel drinkware trend, driven by competitors Yeti, S’well, Hydro Flask and, most notably, Stanley.
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Tervis entered the stainless on-the-go drinkware market in 2016, but, officials say, “struggled to be competitive with larger brands on price at retail locations, and didn’t meet consumer expectations on product quality regarding chipping and peeling until January 2023,” Business Observer reported.
The third-generation family business, which was founded in 1946, won’t seek funding from outside investors to aid the company post-bankruptcy, Donelly said.
However, layoffs are expected in the coming weeks.
- Tervis currently has about 140 employees, down from some 200 last fall and from its peak of 1,000 employees (including seasonal workers) nearly a decade ago, Business Observer reported.
Recovery Plan
Tervis CEO Hosana Fieber says the projected time frame to exit bankruptcy is three to six months.
“We have a thoughtful and executable plan in place to focus the company’s attention and resources back to our legacy product,” Fieber said.
- That plan includes launching a new product category of melamine – a plastic often found in reusable utensils, dishes and cups – to accompany its classic drinkware portfolio, Business Observer reported.
“We didn’t meet consumer standards when we went outside our initial brand position and that’s what we need to get back to,” Fieber said. “We will focus on our classic portfolio while keeping our current high quality, premium stainless product lineup.”
