Many of our readers in New Jersey may have spent at least a part of their week running to the grocery store to snap up the remaining inventory of Hostess snacks such as Twinkies and Ho-Hos. Stores here and across the nation have reported an increase in snack sales since the company who manufactures the products announced that it intended to file for a commercial bankruptcy and liquidate. The liquidation could mean an end to the once-popular snack line.
In addition to losing a brand that has been in existence for many years, the commercial bankruptcy and liquidation could mean the end of 18,500 jobs. The job losses would come from the employees of Hostess, many of whom work in manufacturing plants across the nation. The company asserts that it has been placed in this decision due to the lowering demand for its high-fat, high-sugar snacks and because of an on-going labor dispute.
However, like many companies in New Jersey, the business has seen profits decline as the economy and consumers changed. This decrease in sales led to the $1 billion business to accumulate $860 million in debt. This high debt load may have made repayments to creditors nearly impossible.
Though many in our state and elsewhere have lamented the loss of their beloved snack items, the loss of jobs and income to employees is troubling for many people. The need for a business to file a commercial bankruptcy comes at a great cost and few owners make that decision lightly. For many people, however, a bankruptcy can mean a new beginning with a more stable financial future.
Source: Examiner.com, “The real reasons Hostess went bankrupt – National Political Buzz,” Ryan Witt, Nov. 17, 2012