NEW YORK – The future of Twinkies is virtually assured.
Hostess Brands Inc. got final approval for its wind-down plans in bankruptcy court Thursday, setting the stage for its roster of snack cakes to find a second life with new owners – even as 18,000 jobs will be wiped out.
The company said in court that it’s in talks with 110 potential buyers for its brands, which include CupCakes, Ding Dongs and Ho Hos. The suitors include at least five national retailers such as supermarkets, a financial advisor for the company said. The process has been “so fast and furious” Hostess wasn’t able to make its planned calls to potential buyers, said Joshua Scherer of Perella Weinberg Partners.
“Not only are these buyers serious, but they are expecting to spend substantial sums,” he said.
“We expect the auction and sale process to take about 90 days, and we are pleased to announce the company has a signed stalking horse bid for Journal Register Company from 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC,” said John Paton, CEO of Digital First Media.
Borders filed for Chapter 11 bankruptcy protection at the U.S. Bankruptcy Court in New York on Wednesday.
Borders is hemorrhaging cash at the rate of $2 million dollars a day from underperforming stores. Borders intends to close 200 of its 642 stores nationwide. The closures will come in the next few weeks. Clearance sales could start as early as this weekend.
Borders will receive $505 million in debtor-in-possession financing from GE Capital Partners and others to help with the reorganization. Borders owes over $100 million to various publishers. Book sales nationwide fell 5 percent in 2010. Borders controls 14.3 percent of the book selling market. Barnes & Noble, on the other hand, controls 29.8 percent of the market which is helping them survive the economic downturn.
Borders has been in business since 1971, when it started out with one used bookstore in Ann Arbor, Michigan. Borders was owned by Kmart Corp. from 1992 until 2006. Borders committed a fatal error when it opted out of their e-commerce contract with Amazon.com in 2001. This decision made it possible for Barnes & Noble to eventually double Borders market share.