Libbey, just one of the world’s premier makers of glass tableware, submitted for Chapter 11 personal bankruptcy on Monday, citing the “unprecedented” influence of the coronavirus pandemic on desire for its goods.
The organization had been pursuing a restructuring of its equilibrium sheet even in advance of the pandemic pressured it to close its factories in Toledo, Ohio, and Shreveport, La., and virtually shut down its cafe sales channel.
A seven-yr, $440 million financial loan was scheduled to mature last thirty day period.
But Libbey said Monday that it had been “unable to offset the steep decrease in sales” ensuing from the pandemic, leaving it with no alternative but to file personal bankruptcy for the 1st time in its 202-yr historical past.
“While we entered 2020 with optimistic momentum from our strong finish in 2019, the dramatic and extended influence of COVID-19 on the desire for our goods and on our organization is actually unprecedented in Libbey’s much more than two hundred-yr historical past,” CEO Mike Bauer said in a information release.
Libbey’s lenders have agreed to provide up to $160 million in funding to keep it running through the Chapter 11 course of action. “Entering this course of action is a important stage to deal with our liquidity, bolster our equilibrium sheet and far better placement Libbey for the long run,” Bauer included.
The organization, which was established in 1818 as the New England Glass Organization, sells goods this kind of as tumblers, stemware, mugs, bowls, shot glasses, canisters, and candleholders through food-services, retail and organization-to-organization channels.
Meals-services sales in the U.S. and Canada have been declining owing to “take-out and delivery growing in reputation relative to in-cafe eating,” Brian Whittman, Libbey’s restructuring guide, said in a court docket declaration.
Other headwinds, he said, have involved the migration of customer acquiring from brick-and-mortar retailers to on line commerce and “increased competitive pressures in Latin America, as Chinese companies divert sales of their goods from the U.S. industry to Latin America in buy to prevent the improved tariffs imposed by the United States on Chinese imports.”
Bauer said Libbey is presently viewing some advancement in desire with the gradual lifting of keep-at-household limitations and the resumption of output in Toledo and Shreveport.
