UPDATE: US: Hostess expects mixed response to fire sale
Iconic brands are expected to generate interest in Hostess fire sale
Hostess Brands, the iconic US baker that announced today (16 November) it is winding down operations, has indicated that it expects a mixed response to the planned fire sale of its assets.
Hostess management filed for permission to sell off its assets with a US bankruptcy court and the group suspended operations at all of its plans this morning.
The company said that the move came because it did not have the financial resource to withstand the disruption caused by a nationwide strike, organised by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM). According to Hostess, the industrial action had "crippled" its ability to manufacture and deliver products at multiple facilities.
The board of directors moved to liquidate the business in order to "preserve and maximise the value of the estate", the company said.
A spokesperson for Hostess told just-food that the baker is confident of generating strong interest in its iconic brands.
Hostess has a stable of well-known brands, including Hostess, Drakes and Dolly Madison, which make cake products such as Twinkies, CupCakes, Ding Dongs, Ho Ho's, Sno Balls and Donettes. The company also manufactures bread brands such as Wonder, Nature's Pride, Merita, Home Pride, Butternut and Beefsteak.
"We believe that our brands will be attractive to buyers," the spokesperson said. "However, it is likely that many of our bakeries will not reopen in the near future."
Hostess operates 33 bakeries, 565 distribution centres and 570 bakery outlets. However, over-capacity in the US bakery sector means that Hostess could struggle to find new owners for these facilities.
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