Gird your Twinkies, Hostess lovers: The maker of those frosting-filled yellow logs is preparing to file for Chapter 11 bankruptcy protection this week, says a new report. It’s the second time in recent years that it’s attempted to restructure in court.
The Wall Street Journal cites people familiar with the matter, saying the makers of Twinkies, Wonder Bread and those iconic chocolate Hostess cupcakes with the squiggle of white icing, are carrying more than $860 million in debt.
Rising prices for sugar, flour and other ingredients the company needs to bake up its various smushy offerings are partly to blame, as well as the high labor costs that come with employing around 19,000 people. Even $2.5 billion in sales hasn’t been enough to meet those rising costs.
They’re also in debt to the tune of about $50 million to vendors, which are now asking for Hostess to pay up because of the financial straits, one source told the WSJ. Since the company has filed for Chapter 11 before, in a restructuring move in 2004, those in the know are calling this newest filing a Chapter 22 proceeding.
Hostess has faced challenges luring customers in to buy their goods, as many Americans have left white bread behind for healthier whole grain options. Hostess’ version of a whole-grain loaf, Nature’s Pride, hasn’t done well against its rivals on the shelves.
Stockpile those Twinkies just in case. They’ll last forever anyway, right?
Twinkies Maker Preparing for Chapter 11 Filing [Wall Street Journal]