Tervis bankruptcy: Revenue fell from $90M in 2022 to $33M so far in 2024

Since Tervis Tumbler filed for Chapter 11 bankruptcy Sept. 5, court filings have offered more insight into the rise and fall of the drinkware company. 

Shifts in shopping, competition in the industry and a years-long lawsuit have contributed to its declaration of bankruptcy, according to court records — which show the company owes approximately $32.75 million to creditors.

Founded in 1946, Tervis Tumbler is best known for its double-walled drinkware designed to withstand heat and reduce condensation. It saw a major spike in interest after 2009, when its products began to be sold in retail stores like Bealls, company officials say in a statement.

During the pandemic, Tervis experienced a “boom” in e-commerce, which rose from 15% of global retail sales in 2019 to 21% in 2021, court filings say. To support that e-commerce boom, Tervis launched a state-of-the-art distribution center at its facility in Venice.

However, the uptick was short-lived due to changes in consumer behavior. E-commerce underwent “significant year-over-year declines in recent years, as consumers spent more of their discretionary funds on services and experiences, versus products,” court filings say.

That led to just-as-significant drop in overall revenue post-pandemic: Tervis posted gross revenue of about $90 million in 2022; that fell to $75.8 million in 2023; and as of Aug. 24, it was about $33 million, according to court filings. That's down 63.33% in less than two years. 

The decline of brick-and-mortar stores also hurt Tervis and "dramatically affected current operations," court filings say. “Bed Bath and Beyond’s closure in 2023 further contributed to Tervis’ declining sales," according to court filings.

To help cut costs, Tervis closed its distribution facility and sold its property on Triple Diamond Boulevard in Venice for $15.35 million in August 2023. Currently it is subleasing 60,000 square feet there for its headquarters, paying about $70,000 a month in rent, court filings show.

Tervis also operates retail stores in Ellenton; Osprey; Key West; Panama City Beach; St. Augustine; Frankenmuth, Michigan; Myrtle Beach, South Carolina; and Pigeon Forge, Tennessee. Monthly store rents total $75,000 and are expected to go down to $50,000 by the week ending Nov. 1, court filings show.

Outstanding obligations

During bankruptcy proceedings, Tervis has asked the court for permission to continue paying its employees. At the time it filed for bankruptcy, the company employed 129 people, according to court filings. Company officials say layoffs are expected.

Biweekly payroll is $305,000, a number that is forecast to drop to $205,000 with the week ending Nov. 1, court filings show.

CEO Hosana Fieber has an annual salary of $425,000, according to court filings, a decrease from her 2023 salary of $499,266. (Fieber was named CEO in October 2023, marking the beginning of her third tenure with the company since she first started working there in 2009.) 

Former CEO and current board member and shareholder Norbert R. (Rogan) Donelly has an annual salary of $350,000, court filings show, while chairman emeritus and shareholder Norbert P. Donelly has an annual salary of $250,000. The Donellys (Norbert is Rogan's father) have deferred their compensation pending the company’s reorganization, according to court filings.

Chapter 11 bankruptcy will allow Tervis to restructure its debt. The company has 100 to 199 creditors, according to its bankruptcy filing.

Tervis owes about $27.8 million in unsecured debts, court filings show, and its largest debt is to TMF Plastics of Plano, Illinois, to which it owes more than $10.1 million.

Meanwhile, creditor United Community Bank secured a lien on all of Tervis’ accounts receivable and inventory for $4.95 million, according to court filings.

Tervis assets total $15.7 million, court filings say.

A meeting of Tervis’s creditors is scheduled for 2 p.m. Oct. 7.

Stainless steel challenges

The company reports it has been struggling for years due to industry shifts and a lawsuit with a vendor.

Tervis “continued to grow quickly between 2011–2015,” but the industry was disrupted in 2014 with the introduction of stainless steel drinkware, according to court filings, which named brands like Yeti, Hydroflask and Swell as new competitors.

After years of consideration, Tervis abandoned its “made in the USA” guarantee to enter the market and source stainless steel from China in 2017, beginning what the company calls a “7-year struggle,” court filings say.

Tervis entered into an agreement in January 2017 with Naples-based SIC Products LLC to buy its insulated stainless steel tumblers from SIC’s plant in China.

After SIC Products “refused to provide competitive market pricing,” Tervis terminated its agreement with the company in September 2017, bankruptcy court filings say.

In March 2018, SIC Products filed a lawsuit against Tervis, alleging it breached a two-year contract, violated its fiduciary duty and was producing “knockoffs,” according to court filings.

The case, ongoing now for six-and-a-half years, had been set to go to trial Sept. 23 but is stayed due to Tervis’s bankruptcy filing. Tervis officials, in statements on the bankruptcy and in an interview with the Business Observer, called the lawsuit “burdensome." Officials declined to discuss the lawsuit further. 

‘Bankruptcy is not an end’

The company is now looking at bankruptcy as a way of securing its future, according to court filings.

“Like many businesses, Tervis faced the pandemic, inflation, rising interest rates, higher material costs and higher labor costs and will be restructuring its financial obligations in a means and manner allowed by applicable law so that it can continue in operation,” the company says in court filings. “Bankruptcy is not an end for Tervis but rather a means of ensuring its continued existence and operational success in the decades to come.”

Earlier in 2024, the company says it shifted its business strategy from on-the-go to home occasions. To that end, it has created a new sub-brand, TervisHome, for which it is launching a new melamine product in 2025. Melamine is a chemical compound found in dinnerware Tervis says it is using to meet the trend of blending indoor and outdoor spaces.

“Tervis continues to be heavily invested in monitoring and responding to trends in the industry like fashion, design, sports, etc. and knowing its consumers intimately,” the company says in court filings. “Tervis intends to continue to adapt to consumer demands in this way; flexibility and speed to market are among its key competitive advantages."

Managing Editor Mark Gordon contributed to this report.