Typhoo Tea, a longstanding UK tea brand, finds itself on the brink of financial collapse as it appoints administrators to explore potential rescue options.
Facing mounting debt, Typhoo Tea has filed a notice to appoint administrators from EY, according to recent court documents. This strategic move aims to facilitate the sale of the business, as revealed by the new chief executive, Dave McNulty, who emphasised the necessity of this action for future prospects.
In the past year, Typhoo’s sales have dramatically decreased by 26%, plummeting from £34m in 2022 to a mere £25m. Simultaneously, the company’s losses have surged, escalating to £38m from the previous year’s £9.7m. This financial downturn is partly attributed to a costly break-in at their Merseyside factory, which resulted in significant damage to both equipment and stock. The incident forced Typhoo to incur £24m in exceptional costs during the 2023 financial year.
Recently, Typhoo has undergone significant leadership changes, appointing Dave McNulty, former head of Burts crisps, as the new chief executive. His appointment comes amid efforts to revamp the company’s supply chain practices, including initiatives aimed at addressing ethical concerns on tea plantations in Africa. This shift has led to the termination of contracts with 300 plantations, retaining partnerships with only three. McNulty warned that this could potentially lead to higher consumer prices.
The ongoing developments at Typhoo highlight the precarious situation of historical brands facing modern economic challenges, as they struggle to adapt and innovate in a competitive marketplace.
Typhoo Tea’s attempt to navigate its financial crisis through potential business sales and operational restructuring indicates the depth of its struggles. The outcomes of this strategy could have significant implications for the brand’s future and its stakeholders.
