Tervis (asi/90914), a Florida-based drinkware brand with a near 80-year history, is filing for Chapter 11 bankruptcy as part of a stated effort to reorganize its business.

Court records show the company, founded in 1946, filed a voluntary petition for bankruptcy under Chapter 11 on Sept.5. Chapter 11 is a form of bankruptcy that involves a court-supervised “reorganization” of a debtor’s assets and liabilities. It allows a company to operate as it goes through bankruptcy.

Company leaders indicated that factors like a lawsuit from a previous supplier, fallout from the COVID-19 pandemic, and sagging profitability and sales (amid stiff competition from big-name drinkware brands) were among the factors prompting the Chapter 11 filing. They also indicated that a decision to close a distribution facility and then work to sublease the property has caused challenges, contributing to the need for the bankruptcy filing.

The firm expects to undertake layoffs but intends to keep what executives described as “core” employees to help with the envisioned reorganization.

The bankruptcy “will allow us to take a deep breath and come back stronger and better than we were before,” said Tervis CEO Hosana Fieber in a statement reported by Business Observer. “We want to get in and out (of bankruptcy) as quickly as possible.”

In addition to retail, Tervis sells its drinkware in the promotional products industry. Counselor Top 40 supplier Koozie Group (asi/40480) carries the line. 

“It’s business as usual with Tervis,” said Koozie Group CEO Pierre Montaubin, a member of Counselor’s Power 50 list of promo’s most influential people. “We have been in close contact with them and will support them through this next phase. Tervis is a fantastic brand with a great legacy, and we expect their products to continue to perform well in the promo market.”

The bankruptcy filing shows that Tervis has assets of $10 to $50 million. Business Observer reported that Tervis had about 1,000 employees, which included seasonal workers, in 2015. Nowadays, employee count is down to around 140, the media outlet said.

“This difficult business decision [to go into Chapter 11] was one that we made in order to preserve the company’s legacy and better the company for the future.” Rogan Donelly, Tervis (asi/90914)

Engineers Frank Cotter and G. Howlett Davis founded Tervis after creating double-walled insulated tumbler that became the firm’s flagship product for decades, according to the company. John Winslow, grandfather of current chairman Rogan Donelly, bought the company in the 1950s and moved it from Michigan to Venice, FL.

Donelly indicated that Tervis intends to remain family owned.

“Tervis has been around for 78 years and has weathered various economies by adjusting to market conditions,” Donelly said in a statement reported by ABC News. “This difficult business decision [to go into Chapter 11] 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.”

A key strategy going forward, executives said, will be to focus more on products for home occasions, as opposed to on-the-go occasions. TervisHome, which executives described as a sub-brand, is expected to play an important role in driving that go-to-market emphasis. Relatedly, Tervis is working to launch a new product category that will involve melamine, a type of plastic that can be used to make cooking utensils, plates and other products.

“Going forward, Tervis intends to focus on its core foundation as a classic, locally invested, family-owned brand that provides products for everyday casual dining occasions,” said Fieber, as reported by ABC News. “The brand has unique, long-standing and close relationships with vendors by harboring a consistent family culture, and our team is deeply committed to bringing Tervis back even stronger than it was before.”

Tervis isn’t the only promo supplier to file for bankruptcy this summer. Former Counselor Top 40 firm Delta Apparel initiated proceedings under Chapter 11 in June and has been selling off assets.