Stoli Group USA, Kentucky Owl File for Bankruptcy

Recent consumer trends and global events have been unkind to the Stoli Group USA and its Kentucky Owl brand, which both filed for chapter 11 bankruptcy protection in Texas last week.

The U.S.-based subsidiary behind the budget vodka brand, and also the parent company of Kentucky Owl, has been hamstrung recently by a number of issues. Perhaps most damaging is a reported cyber attack against the company two months ago that crippled their ERP (enterprise resource planning) platform and operational systems. With that digital asset down, the company has run its sprawling business manually since the attack — an almost-impossible task in our modern economy.

Geopolitics have also played a part. Production facilities still located within Russia have long garnered attention from the government there that wishes to regain control of the facilities that privatized following the fall of the USSR. This culminated this summer in Russia seizing two facilities, worth $100 million, while labeling Stoli Group and its owners “extremists” for their opposition to the war in Ukraine. Effects from that fallout have been felt by the U.S. subsidiary.

Another issue has been the ongoing pullback in the spirits industry. Whiskey, in particular, has leveled off, at a time when Stoli Group USA has expanded and further premiumized Kentucky Owl. This brand is emblematic of several issues now hampering American whiskey: too many high-end releases priced too high. Walk into most beverage alcohol retailers these days and you will likely see several Kentucky Owl bottles in the $100-$150 range collecting dust and/or offered at a discount.

Altogether the result is an ugly financial picture. Reportedly, Stoli Group USA and Kentucky Owl are a combined $84 million in debt.

Both brands are subsidiaries of Stoli Group, located in Luxembourg, which is not bankrupt.

The post Stoli Group USA, Kentucky Owl File for Bankruptcy appeared first on Cheers.