Typhoon Tea has been rescued by vape maker Supreme, who will buy the company for £10 million.
120-year-old team builder Fell into administration in November As its sales declined and debts increased.
The new owner said the deal would keep Typhoon “in British hands” but it would seek to reduce overheads.
Manchester-based Supreme e-cigarette brand 88Vape manufactures and distributes nicotine and household products to supermarkets.
Typhoo currently has less than 30 staff in the UK, mainly based in sales and marketing, with most of its operations – both UK and overseas – outsourced over the years.
Supreme Chief Executive Sandy Chadha said, “Tyfo is such an iconic brand. The company said the decision to buy it was a mix of “sound business logic and personal connection”.
It added that the deal was part of Supreme’s strategy to branch out into other areas. The company currently deals in soft drinks, gym supplements and multivitamin gummy brands, as well as non-food items such as batteries and home lighting. It also manufactures sports nutrition and fitness and soft drinks, and has its own sales websites to sell directly to consumers.
Supreme distributes to stores including B&M, Home Bargains, Sainsbury’s, Tesco, The Range and Poundland, as well as HM Prison and Probation Service.
It said it would “enhance” Typhoon’s existing “asset-light, outsourced model” and that it could increase overall profitability, but “with a much lower overhead base”.
Susannah Streeter, an analyst at Hargreaves Lansdown, said that Supreme had struck a deal to buy the firm from management, and that there was now “a strong possibility that Supreme would want to go ahead and look for efficiencies to cut costs.” will try to bring the company back to profitability.”
“It has a loyal following that can build on that, but will also spy new opportunities to connect the tea’s wellness image with the ambitions of its supplements and multivitamin arm,” he added.
Typhoon fell into administration after its pre-tax losses ballooned from £9.6m to £38m. Its sales fell to £25.3m from £33.7m, according to its latest results which cover the year to the end of September 2023.
His debts exceeded the value of his assets, and expenses related to a break-in at his Wirral plant added to his woes.
But Supreme said buying the company was a “significant step” and that Typhoon would “grow” because of consumer loyalty to the tea brand.
Although the tea is priced at the cheaper end of the market, and despite the rebranding effort, Typho has suffered from what analysts say is a widespread slump in black tea sales.
A cuppa remains an everyday staple for many in the UK, but competition from the likes of coffee, soft drinks and herbal teas has boosted sales.
However, despite rising prices reducing the cost of living for many, Typhoon remained one of the biggest names in tea along with PG Tips, Tetley and Yorkshire Tea.
Supermarkets introducing own-label brands have also led to the decline of big names.