Valdosta Daily Times

November 17, 2012

Hostess wraps up business

Merita shuts doors after snack manufacturer motions to liquidate

Jason Schaefer
The Valdosta Daily Times

VALDOSTA — Hostess may have its headquarters in Irving, Texas, but the impact of its bankruptcy has hit close to home.

Merita Bread Bakery Outlet, a Hostess products carrier on North Oak Street, is closing up shop as a result of the snack manufacturer’s motion to liquidate, which it filed Friday with the U.S. Bankruptcy Court.

The store was offering a 50 percent off clearance discount to customers Friday, and the business will close Saturday.

Hostess products line the shelves in Merita, ranging from famous childhood snacks like the pink coconut Snoballs and Twinkies to breakfast cereals, Toaster Pastries, cookies and the Hostess version of the Fig Newton. Merita sold snack boxes Friday for $1.20 each and snack cakes at a deal of seven for $2.45.

Not all of the products sold by Merita are Hostess brand, but enough of them are to put the little shop out of business. Employees and owners declined to comment about the number of jobs that will be lost or the impact the bankruptcy will have on the workers, but owners at the neighboring convenience store Oak Foods estimates between two and five were employed by the store.

Three Merita delivery trucks were parked outside Friday, giving the impression that loads of product were being moved. Printed signs hung on the door, reading “Closing Sale 50 percent off all product Saturday.”

The cashier, who wished to remain anonymous, said the shop was notified of Hostess’s bankruptcy Friday morning, and that she has not had enough time to consider her new problem of finding work.

The closure of Hostess means the loss of 18,500 jobs, 33 factories and 500 bakery outlet stores nationwide—Merita being just one of hundreds.

The company’s decision to liquidate comes after a battle with thousands of union workers who went on strike last week, rejecting a contract offer that slashed wages and benefits. The union workers on strike represent about 30 percent of the company’s workforce.

Hostess filed for Chapter 11 bankruptcy protection in January, the second time in less than three years. The company has struggled through issues with high pension, wages and medical costs related to its unionized workforce.

While liquidation could mean the purchase of one or several of Hostess’s popular brand names, including Twinkies, CEO Greg Rayburn told the press no buyers were showing an interest in rescuing the company.

Andrea Schruijer, Executive Director of the Valdosta-Lowndes County Industrial Authority, is sad to see any business go, and feels Merita’s closure is a strong example of how large industry can have nationwide influence.

“It’s unfortunate when a large company like this, which has been open a long time and has a large number of employees in Texas closes, and we see those trickle down effects,” Schruijer said. “It’s just indicative of how large companies represent throughout the nation as it relates to logistics and distribution.”

While less than five jobs will be lost in Valdosta, Schruijer feels that is still too many.

“Every job is important, whether it’s two jobs or 200 jobs,” Schruijer said. “They’re still important to the community.”