Instant Brands, the maker of the popular Instant Pot pressure cooker and other kitchen appliances, filed for chapter 11 bankruptcy on Monday.
The Illinois-based company has struggled with declining sales and financial turbulence exacerbated by consumers’ reduced discretionary spending amidst inflation. The decision to file for bankruptcy came after a prolonged period of economic strain, with Instant Brands registering more than $500 million in both assets and liabilities.
In 2019, Cornell Capital, a private equity firm, purchased Instant Brands and merged it with kitchenware company Corelle Brands. However, despite this, the company has been unable to reverse the downtrend in its sales performance; the firm’s other product lines, including Pyrex and Snapware, have been insufficient to offset the dwindling popularity of the Instant Pot cooker. Over the past few months, the company has collaborated with restructuring advisors to address its financial situation and enhance its balance sheet, but the results have been lackluster.
According to a recent report by S&P Global, Instant Brands’ net sales in Q1 2023 experienced a decline of 21.9% compared to the same period in the previous year. This was the seventh straight quarter where the company witnessed year-over-year sales contraction. The S&P report attributed the poor performance to “lower discretionary spending on home products, lower retailer replenishment orders for its categories, and some retailers moving to domestic fulfillment from direct import.”
Instant Brands CEO Ben Gadbois acknowledged the challenges posed by tightening credit terms and increasing interest rates, asserting that these factors have impaired the company’s liquidity and rendered its capital structure unsustainable. In spite of the obstacles, Gadbois remained optimistic about the Instant Pot product’s longevity while recognizing that “no product stays at a phenom level forever.”
The journey of Instant Brands started in 2009 when Robert Wang, Yi Quin, and three other partners established the company in Canada, before selling it to Cornell Capital a decade later.
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