Hostess Corp., In Chapter 7, Becomes A Case Study In Area College Courses
By Steve Tawa
PHILADELPHIA (CBS) — The odyssey of Hostess Brands is not only playing out in bankruptcy court and business boardrooms. Its liquidation is also being followed in schools of business on university campuses.
At St. Joseph’s University, Dr. Rich George, professor of food marketing, says students feel a connection to the iconic brand since they’ve certainly downed their share of Twinkies and Ho Ho’s.
“Focus on the brand equity,” George advises his marketing students.
Major bakeries like Flowers Foods (the maker of Philadelphia’s Tastykakes) are showing interest in the Hostess brands, and George believes a company like Walmart could buy some of those brand names, then farm out the work.
“Hostess and its stable of brands are just terrific brands, which are a little slice of Americana,” he tells KYW Newsradio.
At Drexel University’s LeBow College of Business, associate finance professor David Becher says the Hostess situation presents a snapshot on Chapter 7.
“It’s a publicly traded firm,” he notes. “Sometimes the value of the company is worth more in bankruptcy than it is going forward.”
His finance students are learning in this case that it’s more advantageous to the owners to sell off the assets piecemeal, which will bring in more money, than trying to survive as a company.