Private equity investor Zetland Capital has taken a majority stake in Typhoo Tea as the brand battles to turn around years of losses and the structural downturn of the black tea market.
Zetland, a London-based PE firm led by Ahmed Hamdani, has acquired control of the brand from Indian conglomerate Apeejay Surrendra Group and a number of its lenders.
As part of the deal, current minority shareholder Abercross will also expand its shareholding.
Typhoo CEO Des Kingsley said the deal marked the start of a “new era” for the brand, adding: “It has secured major investment that will enable us to reassert our brands both in the UK and internationally to deliver profitable growth.”
Typhoo’s most recently filed accounts show a pre-tax losses of £29.9m for the 12 months to March 2019, up from £20m the prior year. Revenues also slumped to £60.9m from £70.2m.
Typhoo then blamed the slump on its pursuit of an “aggressive” sales growth strategy focused on boosting its own-label business, which increased the business’ complexity, reduced operational efficiency and depressed margins.
Kingsley said this week: “After a challenging two years, we are pleased that we can now continue with our programme of rebuilding one of the nation’s favourite tea brands. We have plans in place that will result in the creation of new jobs across all areas of the business.
“We are delighted that Zetland’s support will allow us to invest in our factory and ensure a bright future for the company.”
Typhoo was the first brand to sell ready-packaged tea and the first tea brand to introduce a green tea blend into the UK, while today it houses a range of brands in the growing herbal and fruit infusion market.
Hamdani, founder and chief investment officer at Zetland, added: “Typhoo Tea has a strong heritage and brand, having made tea in the UK for nearly 120 years. We are delighted to support Des and the rest of the team.
“Our partnership will enable investment at an important time for the company and we are confident that Typhoo can regain its reputation as one of Britain’s most loved brands and drive innovation in the sector.”
The Grocer’s Top Products data showed Typhoo’s struggles continued in 2020, losing a further £1.2m of UK retail sales after its volume sales fell by nearly a fifth.
In early 2020, the company undertook an organisational restructure, putting over 70 jobs on the line, describing the move as “necessary to safeguard the future of the business”.