The 78-year-old manufacturer believes the setback, stemming from multiple factors, will make the business stronger and better.
Longtime Sarasota County drinkware manufacturer Tervis, founded nearly 80 years ago, has filed for bankruptcy.
Core challenge: Overcoming a drop in discretionary spending in a high-interest rate environment.
What’s next: Company officials hope to exit bankruptcy quickly, within three to six months.
Venice drinkware manufacturer Tervis, a brand that dates back nearly 80 years and was once one of the largest employers in the Sarasota-Bradenton region, has filed for Chapter 11 bankruptcy.
The filing states the company has total assets and liabilities from $10 to $50 million. The company filed for bankruptcy Thursday afternoon, and then held a town hall meeting for employees.
Tervis executives, in an interview in a conference room in the company’s headquarters prior to the filing, say the bankruptcy stems from several factors. The list includes:
A post-Covid spike and then a just-as-sharp decline in e-commerce sales
A long-lasting drop in consumer discretionary spending (“People are struggling to buy groceries, things cost more and so that leaves less money for other things and puts more pressure on small businesses,” says CEO Hosana Fieber.)
Operating expenses that have inflated in the post-Covid era have made profitability difficult
Retail locations that have not recovered back to pre-covid traffic levels have become unprofitable.
The closure of a location from the decline in e-commerce that’s tied to lease expense obligations.
What the company calls a “burdensome” lingering lawsuit filed in 2018 from a previous supplier that “has come with its own financial burdens.” (Company officials declined to discuss the lawsuit or name the plaintiff; Sarasota County court records show Tervis was sued by Naples-based SIC Products in March 2018 for a contract dispute. SIC stands for Seriously Ice Cold.)
Fieber and Tervis Chairman Rogan Donelly say the Chapter 11 filing, while painful, is a necessary step to put the company, in its third generation of family ownership, on better financial footing. Asked about obtaining funding from outside investors to aid the company post-bankruptcy, Donelly says that’s not currently in the plans and the business will remain family-owned.
“The brand is still strong,” Donelly says.“Tervis has been around for 78 years and has weathered various economies by adjusting to market conditions. 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.”
“This will allow us to take a deep breath and come back stronger and better than we were before,” adds Fieber. “We want to get in and out (of bankruptcy) as quickly as possible.”
Despite the bankruptcy setback, Tervis officials remain optimistic about the future of the company.
One part of the reorganization plan, say company officials, “requires shrinking some of the company and minimizing “fixed expenses in order to allow consistent profitability and then regrow the brand.”