As much as $1 billion (£790 million) in liabilities forced the creator of Pyrex glassware and Instant Pot multicookers to seek bankruptcy protection.
High borrowing rates and sluggish demand are to blame for Instant Brands’ predicament, the company says.
With almost 2,400 employees, the firm intends to remain running throughout the transition.
This follows an April warning from rival cookware company Tupperware that it may go bankrupt unless it swiftly found fresh finance.
Instant Brands claims that sales were particularly high during the outbreak because people were confined to their homes.
“tightening of credit terms and higher interest rates impacted our liquidity levels and made our capital structure unsustainable,” stated CEO Ben Gadbois.
In a court filing, the company’s newly hired chief restructuring officer Adam Hollerbach blamed a decline in sales on customers’ reluctance to make large purchases for the house in the wake of the epidemic.
Cornell Capital, a private equity firm, has announced that its Illinois-based business would continue operations with the support of $132.5m in additional funding from its current lenders in order to see it through the restructuring process.
S&P Global downgraded Instant Brands this week, citing a decline of over 22% in net sales year over year for the first three months of 2023.
The declaration was made as the price of basic necessities, such as food and power, continues to climb, forcing individuals to cut down on discretionary spending.
The US Federal Trade Commission (FTC) accused Instant Brands of deceiving consumers by labeling their Pyrex glass measuring cups as “Made in USA” when in fact part of the cups were imported from China. In January, Instant Brands settled the FTC’s allegations by agreeing to pay a fine and alter its marketing strategies.
In addition to the more than 100-year-old cookware brand Pyrex and the 2010 debut of Instant Pot, Instant Brands’ kitchenware offerings also include Corelle, CorningWare, and Snapware.
Tupperware, a US-based manufacturer of food storage containers, issued a dire warning that company would go bankrupt in April if it couldn’t get fresh funding soon.
“Substantial doubt about its ability to continue as a going concern” was cited by the 77-year-old company.
Tupperware has been trying to appeal to a new generation of consumers, but the effort has so far been unsuccessful.