- September 14, 2024
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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:
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.”
Fieber says the projected time frame is three to six months. “We have a thoughtful and executable plan in place to focus the company’s attention and resources back to our legacy product,” she says, which means, essentially, it will concentrate on home occasions versus on-the-go occasions. That includes a new sub brand, TervisHome, and a new product category launch coming next year.
Tervis currently has about 140 employees, down from some 200 last fall, according to previous interviews. That number will shrink more in the coming weeks, say Tervis officials, as the company cuts expenses, though officials say it was too early to provide a specific number of job cuts. The current 140-person payroll is down from a peak of 1,000 employees, including seasonal workers, in fall 2015. Tervis doesn’t disclose annual revenue figures.
“We can’t do this (comeback) without people,” Fieber says. “We will still need to have a solid core group of people.”
Tervis was founded in 1946, when Detroit engineers Frank Cotter and G. Howlett Davis created the double-walled insulated tumbler that became the company’s core product for decades. They named the company Tervis after the last three letters of their names. Donelly's grandfather, Casey Key entrepreneur John Winslow, bought the company in the 1950s and moved it from Michigan to Venice. Winslow died in 1989 and his son-in-law, onetime Wall Street banker Norbert Donelly, Rogan’ father, took over the business.
Based out of a facility on 201 Triple Diamond Blvd., Tervis, according to the narrative in its bankruptcy filing, built “a strong presence in the Southeast as (the products were) developed to survive the heat in warmer climates with its double-wall construction that reduces condensation, originating as a product people had in their homes, on their boats and in the golfing world. Many of the brand’s initial ‘snowbird’ customers would buy products in Florida and take them back to their northern homes during the summer months.”
The term Tervo-maniacs eventually came to be a core part of the company’s brand, with customers stocking their cupboards and cabinets with Tervis products — then boasting about how many they have. Tervis products started showing up in movies and TV shows, too.
A key ingredient in building that big following came from licensing. That gave Tervis the ability to customize cups in everything from Marvel to the NFL and Harry Potter to Guy Harvey, the narrative states. Even today, Tervis maintains over 50 licenses, which, the company says, “is a key differentiator versus its competitors in the drinkware category.”
Licensing generated growth in multiple ways, too. In 2009, the company, the bankruptcy narrative states, “began to get bigger retail accounts from trade show appearances and a larger geographic presence in well-known retail outlets like Bed Bath and Beyond, Bealls, Linens ‘n’ things and more, sparking the company to invest more in its infrastructure and people. Licensing was also a huge catalyst for tremendous growth in sales, storefronts and brand awareness, resulting in a much more internally sophisticated company.”
The company’s leadership began to shift over time as well, with Norbert Donelly first bringing on a few different outside leaders, and then turning toward Rogan, who was named president in 2016 and CEO in 2021. Fieber’s Tervis leadership path has been more winding: She first joined the company in 2009, left it in 2015 and came back in 2017, first as vice president of finance, and was then promoted to COO and CFO. She left again for a brief period in 2023, then came back, as CEO, last October. Rogan Donelly, even with the October 2023 title change, remains a key decision maker with the company.
While the company’s leadership began to shift from the second to the third generation, an outside force began to impact the business: stainless steel drinkware, a major industry disruption. Multiple new brands entered the industry in 2014-2015, such as Yeti, Hydroflask, Swell, and, more recently, Stanley.
“As consumers jumped on the new trend of stainless drinkware solutions, Tervis wrestled with whether to follow the trend or not, given it would require abandoning the made in the USA claims and sourcing stainless steel products from China,” the narrative states. “The on-the-go and stainless drinkware disruption of the market created an expectation of keeping products cold and hot for longer periods of time and initiated Tervis’ effort to expand into the stainless category.”
Tervis entered the stainless on-the-go drinkware market in 2016, but, officials say, “struggled to be competitive with larger brands on price at retail locations, and did not meet consumer expectations on product quality regarding chipping and peeling until January 2023.”
Tervis, according to the bankruptcy narrative, then “shifted back to focusing on staying relevant to its core mission and legacy of being premium drinkware in people’s homes and defining its competitive advantages.”
That move included launching its Duraprint technology, which, the company says, “delivers a dishwasher safe product and eliminates chipping and peeling.”
The company, even before bankruptcy, had been taking steps to cut costs as this marketplace shift was happening. A big one was selling its building, which it did in summer 2023 for $15.35 million. It leased back 60,000-square-feet to maintain operations. Then, the narrative states, “in early 2024, Tervis made the difficult decision to close its distribution facility and work to sublease the property, which has proven difficult.”
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.”
Shrinking and also shifting to some new products, Fieber says. That includes the new sub-brand, TervisHome, and a new product category launch of melamine, a plastic found in many reusable plates, utensils, and cups, to accompany its Classic Drinkware Portfolio. Tervis’ melamine line will launch in early 2025.
“We didn’t meet consumer standards when we went outside our initial brand position and that’s what we need to get back to,” Fieber says. “We will focus on our classic portfolio while keeping our current high quality premium stainless product lineup.”
Adds Fieber: “Rogan and I are deeply committed to bringing Tervis back even stronger than it was before and leaning on our core roots and strong legacy to make that happen.”
