iRobot, famous for its Roomba vacuum, has filed for Chapter 11 bankruptcy protection. However, the company assures customers that there will be no disruptions to services during its restructuring.
Founded over 30 years ago, iRobot has faced tough times recently. Increased competition and falling stock prices have put pressure on the company. In 2022, Amazon planned to buy iRobot for about $1.7 billion, but this deal fell through due to regulatory issues in Europe.
After the Amazon deal collapsed, the e-commerce giant paid iRobot a termination fee of $94 million. iRobot announced it would restructure to stabilize its finances. Now, it will be acquired by Shenzhen PICEA Robotics Co., Ltd., its main manufacturer, through a court-supervised process. PICEA has a strong track record, with over 20 million robotic vacuum cleaners sold worldwide.
iRobot’s CEO, Gary Cohen, stated that this move should improve their financial standing and ensure continuity for users, partners, and customers. The company is confident it can keep operating normally throughout the bankruptcy process, with no expected interruptions to product support or app functionality.
Interestingly, premarket trading saw iRobot’s shares drop nearly 70% to $1.31, reflecting investor concerns over the company’s future. According to a recent survey, many consumers are still hopeful about robotic vacuum technology, with 72% expressing interest in upgrading to smarter devices, showing a market potential that iRobot may tap into if it emerges from this restructuring successfully.
iRobot expects to wrap up its Chapter 11 process by February, aiming for a stronger footing in a competitive market. As the tech world shifts rapidly, companies like iRobot must adapt or risk being left behind.
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Contracts and orders, Manufacturing sector, Bankruptcy, Business, Article, 128411370
