Pyrex cookware company files for bankruptcy in US

A Instant BrandsIt produces Kitchen Utensils brand PyrexThe bankruptcy filing is this Monday, the 12th to usAfter the country succumbed to fiscal interventions due to lower consumer spending that had to deal with inflation.

The Illinois-based company, an appliance maker, has filed for Chapter 11 protection in Houston bankruptcy court, with more than $500 million (R$2.4 billion) in assets and liabilities. Private equity firm Cornell Capital bought the company in 2019 and merged it with another cookware maker, Coral Brands.

Sales are falling, which shows how hard Instant Brands has been to grow its business based on a successful product. The seller of the Pyrex and Snapware brands has been working with restructuring advisers for months to improve its balance sheet and financials, as consumers’ longtime craze for the Instant Pot cooker has waned.

The company’s net sales fell 21.9% in the first quarter of this year compared to the same period in 2022, the seventh straight quarter of year-over-year sales declines, S&P Global said last week, downgrading Instant Brands. The company ended March with cash flow of US$95 million (R$463 million), and the business was not generating cash, the valuation report said.

“Performance of instant brands continues to weigh on consumer demand as declining discretionary spending on domestic products, falling retailer replenishment orders for their categories, and some retailers moving to direct import domestic fulfillment,” said B.

The Wall Street Journal reported in March that as sales growth for the flagship product slowed, mismanagement of instant brands and cost pressures from pandemic-related supply chain issues put the company in dire financial straits.

The bankruptcy filing “provides time and flexibility to continue discussions with all financial stakeholders in an effort to reach a consensus path to strengthen the company’s financial position,” Instant Brands said on Monday.

Guggenheim Partners is serving as financial advisor to Instant Brands for the bankruptcy proceedings, while Davis Polk & Wardwell is providing legal advice. Lenders have pledged $132.5 million (R$647 million) in financing to carry the company through bankruptcy proceedings, the company said.

Ben Godbois, president and CEO of Instant Brands, said tight credit conditions and high interest rates have affected its liquidity levels and made its capital structure unsustainable.

In March, he told the Wall Street Journal that he believed the “Instant Pot product would be around for a long, long, long time,” but added that “no product is ever going to be a standout.” Anticipating growth through international expansion, Godbois immediately offered to develop new cookware under the eponymous brand.

Instant Brands was founded in 2009 by Robert Wang, Yi Qin and three partners in Canada and sold to Cornell Capital a decade later./Dow Jones Newswires