One of Britain’s oldest tea companies on brink of administration as shoppers swap to coffee
ONE of Britain’s oldest companies is on the brink of administration after falling into debt.
Typhoo Tea has filed noticed that it intends to appoint administrators, according to The Telegraph.
Filing a notice of intent to appoint an administrator typically gives a business 10 days before it officially goes bust, although it can be cut shorter if needed.
During that time it can continue to trade while a rescue buyer is sought and it won’t disappear from supermarket shelves.
Typhoo is using the process to explore rescue options, according to reports, with administrators from EY lined up.
The Sun has contacted Typhoo Tea and administrators at EY for comment.
Typhoo’s sales fell from £34 million in 2022 to £25 million last year.
At the same time, losses rose from £9.7 million in 2022 to £38 million in 2023.
The brand was founded in 1903 by Birmingham grocer John Sumner and was once one of the UK’s best-selling tea brands.
Its current chief executive is Dave McNulty, the former head of Burts crisps.
But it has been facing slowing sales, with the popularity of coffee, energy drinks and even bubble tea overtaking the traditional cuppa.
The UK bought 5.7million fewer pounds of tea in the year to May 2018, the biggest fall in four years.
The cost of living crisis has also meant that households are switching from big brand teabags to cheaper, supermarket own-brand alternatives.
In addition, Typhoo suffered a break-in at its factory in Merseyside, which involved “extensive damage” to machinery and tea stock.
This delayed the sale of the factory, which was eventually completed in June this year and contributed to its steep jump in losses.
OTHER FIRMS THAT HAVE FILED FOR BANKRUPTCY OR ADMINISTRATION
Typhoo is not the first firm to file for administration or go bankrupt in recent years.
Tupperware Brands, which sells in 90 countries, has filed for bankruptcy in the US.
Last year, Tupperware Brands, a 78-year old firm, warned it may go bust unless it could quickly raise new funds.
The brand has been facing slowing sales as it tries to target a younger audience.
The Fourpure brewing company placed itself into voluntary administration to “protect itself from market pressures”
In Good Company, the business that owns Fourpure and another craft beer brand called Magic Rock, said the move will “protect the brand from future liability, and tough commercial realities in the drinks and hospitality industries”.
Wilko plunged into administration in August last year as PricewaterhouseCoopers (PwC) failed to find a rescue bidder.
The brand name has since returned to the high street though after closing 400 stores.
The Body Shop collapsed into administration in February, with 82 branches closing thereafter.
However, it was pulled out of going bust after being bought out by growth capital firm Aurea earlier this month.
Paperchase, M&Co and Cath Kidston have all fallen into administration since the start of 2023 too.
Last month, cosmetics company Avon filed for bankruptcy after multiple lawsuits and financial struggles.
What does going into administration mean?
WHEN a company enters into administration, all control is passed to an appointed administrator.
The administrator has to leverage the company’s assets and business to repay creditors any outstanding debts.
Once a company enters administration, a “moratorium” is put in place which means no legal action can be taken against it.
Administrators write to your creditors and Companies House to say they’ve been appointed.
They try to stop the company from being liquidated (closing down), and if it can’t it pays as much of a company’s debts from its remaining assets.
The administrator has eight weeks to write a statement explaining what they plan to do to move the business forward.
This must be sent to creditors, employees and Companies House and invite them to approve or amend the plans at a meeting.
A Notice of Intention is used to inform concerning parties that a company intends to enter administration.
It is a physical document which is submitted to court, usually by directors aiming to prevent a company from being liquidated.
Like with a standard administration process, a Notice of Intention stops creditors from taking out any legal action over a company while they try and rectify the business.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories