Typhoo Tea collapses into administration as more than 100 jobs at risk

Typhoo Tea, one of the UK’s oldest and most respected tea companies, has collapsed into administration, putting more than 100 jobs at risk. The company, founded in 1903 by John Sumner, has faced significant financial challenges and has appointed administrators from the firm Kroll to take over. Despite efforts in the past two weeks to settle debts with creditors, Typhoo has been unable to avoid insolvency.

In a statement released by the company, it was revealed that Typhoo had been experiencing cash flow constraints due to supply chain disruptions and service issues. The administration process will provide Typhoo Tea with protection as it works towards finalizing the sale of its business and assets to potentially rescue the company.

Typhoo, known for its iconic slogan “you only get an oo with Typhoo” and endorsements from celebrities like Nigella Lawson and Ben Fogle, has seen a decline in market share in recent years, partly attributed to a shift in consumer preferences towards coffee. Despite its financial struggles, Typhoo products will continue to be available in supermarkets as efforts continue to find a new owner for the brand.

The company reported a substantial loss of £38 million last year, with revenues decreasing by a quarter to £25.3 million. Typhoo also faced operational disruptions when its Merseyside factory was vandalised, resulting in extensive damage. These challenges led to exceptional costs of £24 million, contributing to the company’s mounting debt of £73 million as of September 2023.

Since 2021, Zetland Capital has been a major investor in Typhoo, with recent leadership changes including the appointment of CEO Dave McNulty. The company has been working on restructuring its supply chain operations, aiming to address issues such as operational disruptions and combat sexual violence against female workers in East African tea plantations.

As Typhoo Tea navigates through this difficult period, efforts are being made to secure a sale that will help revitalise the brand and preserve its longstanding legacy in the tea industry. The company’s administration marks a critical juncture in its history, with hopes of finding a new owner to steer Typhoo towards a brighter future.

In conclusion, the collapse of Typhoo Tea into administration highlights the ongoing challenges faced by traditional businesses in adapting to changing consumer preferences and operational disruptions. The legacy of Typhoo as a British tea institution serves as a reminder of the importance of innovation and resilience in the face of adversity. It remains to be seen how the company will navigate through this precarious situation and emerge stronger on the other side.