Glassware maker Pyrex and Instant Pot filed for Chapter 11 bankruptcy protection as the already-struggling company takes a hit from inflation, and Americans cut spending.
According to a filing filed this week with the US Bankruptcy Court for the Southern District of Texas, Instant Brands, based outside of Chicago, has more than $500 million in assets and liabilities.
Inflation has hit consumers after a binge on household goods fueled by a COVID-19 pandemic, but spending has also moved elsewhere as people are able to travel again or go to restaurants and shows.
And Instant Pots, which became a must-have appliance several years ago, have been disappearing from kitchens.
Sales of “electronic multicookers,” most of which are instant pots, reached $758 million in 2020, the start of the pandemic. Sales had plummeted 50% last year, to $344 million.
Dollar and unit sales are down 20% from last year in the period ending in April, according to market research firm NPD Group.
Just last week, S&P Global downgraded the company due to lower consumer spending in discretionary categories and warned that the ratings could fall again if Instant Brands seeks bankruptcy protection.
“Net sales decreased 21.9% in the first quarter of fiscal 2023, relative to the same period last year,” the S&P analysts wrote. “This marked the seventh consecutive quarter of year-over-year sales contraction. Instant Brands’ performance continues to suffer from depressed consumer demand due to lower discretionary spending on household products.”
US manufacturers have also been hit, as have consumers, by high inflation and higher interest rates.
Ben Gadbois, Instant Brands’ chief executive and president, said the company managed to overcome the COVID-19 pandemic and global supply chain issues, but ran out of cash.
“Tighter credit terms and higher interest rates affected our liquidity levels and made our capital structure unsustainable,” Gadbois said in a prepared statement Monday.
Instant Brands, whose brands also include Corelle, Snapware, CorningWare, Visions and Chicago Cutlery, said it has received a commitment of $132.5 million in financing from new borrowers held by its existing lenders.
The company was acquired four years ago by private equity firm Cornell Capital and merged with another cookware company, Corelle Brands.
Instant Brands entities located outside of the US and Canada are not included in Chapter 11 filings.
