Pyrex maker files for US bankruptcy after inflation and high rates batter sales
The maker of Pyrex and Instant Pot has filed for Chapter 11 bankruptcy as dwindling sales and high inflation have battered the business.
Instant Brands, which is US owned, is said to have much as $1bn (£790m) in liabilities.
Instant Brand, which trades in John Lewis and Argos for upwards of £180, was impacted by a slowdown in spending post-pandemic as the public now have less disposable income to splurge on home appliances.
“After successfully navigating the Covid-19 pandemic and the global supply chain crisis, we continue to face additional global macroeconomic and geopolitical challenges that have affected our business,” Ben Gadbois, president and chief of Instant Brands, said.
“In particular, tightening of credit terms and higher interest rates impacted our liquidity levels and made our capital structure unsustainable,” he added.
Its 2,400 employees have not been impacted by the move.
To further help business operations has also secured $132.5m (£104.8m) in financing from its existing lenders.
A Chapter 11 bankruptcy can be helpful for struggling companies as it allows them to operate as normal while repaying money to creditors.
As part of the process it has also drafted Adam Hollerbach from AlixPartners as chief restructuring officer, to help guide the business.
Jason Freedman is a fraud and asset recovery partner at the law firm, Gowling WLG
“This is a sensible decision for the business while it looks at turnaround strategies to help ensure it reignites the customer resonance that the household names under its wing once held,” Jason Freedman, fraud and asset recovery partner at the law firm, Gowling WLG, told City PM
“Ensuring that their online presence is fully explored and optimised will be a key element of this turnaround, as well as identifying more contemporary customer needs to respond to as part of their product choice and distribution.”
He added: “Given the slew of acquisitions taking place in the retail space at the moment – with the owner of Yo! Sushi being snapped up by one of Japan’s biggest food companies this week – it is hoped that a viable buyer will come to the fore and take advantage of the opportunity this presents.”
It follows a warning by popular kitchen stable Tupperware in April that it would go bust if it did not raise its finances.
The food storage maker has struggled since its products are failing to appeal to a younger audience.