Twinkies may survive despite maker Hostess Brands going out of business. The cream-filled golden snacks just need a good buyer who will continue their legacy.
Starting Monday, Hostess Brands Inc., which makes Twinkies, Ding Dongs, Ho Ho's, Wonder Bread, and more, will go up for sale in a New York bankruptcy court.
After a crippling employee strike, debt, management issues, rising labor costs and more, the snack brand decided that it could no longer revive after declaring bankruptcy twice in the past few years. It is now asking the court for permission to sell itself and go out of business.
It is likely that the brand will be resold, even if it is in parts. Hostess Brands still brings in good revenue. It brings in $2.5 billion in revenue per year and Twinkies brought in $68 million so far this year alone, so the products may be valuable to other snack companies.
"There's a huge amount of goodwill with the commercial brand name," John Pottow, a University of Michigan Law School professor who specializes in bankruptcy, told the Associated Press. "It's quite conceivable that they can sell the name and recipe for Twinkies to a company that wants to make them."
Hostess has already seen interest in its products from potential buyers. Flowers Foods Inc and private equity food investment firm Metropoulos & Co. are among those who may purchase some of the brands.
The sale of Hostess Brands won't be a quick process. A company that specializes in liquidation needs to be appointed to sell the assets and the sale could take six months to a year to complete.
Hostess had a series of problems that led to its demise, but a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union put the company over the edge. The union workers were not happy with a recent contract offer. With 30 percent of the company on strike, Hostess wasn't able to keep operations running normally and they lost out on revenue.
Nearly 18,500 workers will lost their jobs with Hostess going out of business. Operations at its 33 factories have been suspended and hundreds of outlet stores will close after the sell their remaining products.
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