With appliance sales plummeting, kitchenware manufacturer, Instant Brands filed for bankruptcy this week. Instant Brands is the maker of Instant Pot, Corelle, Snapware, and Pyrex, among others.
On Monday, June 12, Instant Brands sought bankruptcy protection under Chapter 11 in the Southern District of Texas. The private corporation reported having assets and liabilities of between $500 million and $1 billion.
With the support of the $132.5 million in fresh finance, Instant Brands will keep running as normal throughout the bankruptcy process. However, the company's financial situation is drastically different today than it was about 15 years ago.
Instant Brands CEO Ben Gadbois stated in a press release that the "tightening of credit terms and higher interest rates" had a negative impact on the company's finances.
Instant Pot's Immediate Success
The company's electric pressure cooker has become a standard appliance in American households, and its sales were a major contributor to Instant Brands' success. In 2009, Instant Pot inventor and engineer Robert Wang had immediate success with his creation. The device can steam dumplings or roast a chicken, earning it a reputation for durability and adaptability.
While there will always be die-hard enthusiasts, it seems that pressure cookers are not as popular as they once were. Toward the end of the year 2022, Eater published a story and posed the question, "Is the Instant Pot's star finally fading?"
The Verge stated that sales of electronic multicookers had dropped by 50% over the previous three years.
For instance, in March, Gadbois told the Wall Street Journal that the "Instant Pot product is going to be around for a long, long, long time," but he also noted that "no product stays at a phenom level forever."
Consistency in Revenue Decline
According to S&P Global statistics via CBS News, Instant Brands had a decline of roughly 22% in sales during the first quarter of 2023 compared to the same period a year earlier. S&P's latest credit rating assessment indicates this is the seventh consecutive quarter of declining revenues for the firm.
Gadbois stated on Monday that despite having successfully navigated the COVID-19 pandemic and the global supply chain crisis, the company is still experiencing difficulties due to global macroeconomic and geopolitical factors.
S&P Global reports that at the end of March, Instant Brands had around $95 million in cash on hand. It may take a while for Instant Brands' revenue to recover, the S&P report warns, referring to the company's $510 million in bank debt.
"Instant Brands' performance continues to suffer from depressed consumer demand due to lower discretionary spending on home products, lower retailer replenishment orders for its categories, and some retailers moving to domestic fulfillment from direct import," as noted by S&P analysts.