iRobot Corp., the maker of Roomba robotic vacuums, said it has entered a pre-packaged Chapter 11 bankruptcy restructuring and agreed to sell the company to its primary contract manufacturer.
The move aims at stabilizing iRobot’s finances while preserving its ecommerce, connected-device and direct-to-consumer operations. The Bedford, Massachusetts-based company said it has signed a restructuring support agreement with its secured lender and Shenzhen PICEA Robotics Co. Ltd. and Santrum Hong Kong Co. Ltd., together known as Picea.
Under the agreement, Picea would acquire 100% of iRobot’s equity through a court-supervised process. iRobot and certain affiliates have voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware.
The company said it expects to complete the restructuring by February.
Prior to its bankruptcy filing, iRobot was No. 459 in the Top 2000. The database ranks North America’s largest online retailers by their annual ecommerce sales and more.
iRobot to continue operations during bankruptcy process
iRobot emphasized that it would continue operating in the ordinary course during the bankruptcy process. It said it does not anticipate disruption to its ecommerce channels, mobile app functionality, customer programs or product support. That continuity is central to the company’s business model, which relies heavily on direct-to-consumer online sales, digitally ordered accessories and connected devices that require ongoing software updates and cloud services.
Unlike traditional consumer electronics manufacturers, iRobot’s relationship with customers does not end at the point of sale. Revenue from replacement parts, accessories and recurring engagement through its app-based ecosystem is closely tied to the performance and availability of its ecommerce platforms. Any interruption to ordering, fulfillment or app functionality could quickly erode customer confidence and recurring revenue. That makes digital continuity a critical element of the restructuring.
To support ongoing operations, iRobot said it has filed customary motions allowing it to pay employees, vendors, and other creditors in the normal course of business. The company said supply chain relationships, logistics partners and global distribution will remain in place throughout the Chapter 11 process.
CEO Gary Cohen said the company intends for the transaction to provide financial stability while maintaining continuity for customers and partners.
“The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners,” Cohen said in a statement.
Roomba maker’s plan to get through Chapter 11 process
Under the proposed plan, existing common shareholders should expect to receive no recovery. The plan would cancel all outstanding equity interests if the court approves the restructuring. Following completion, iRobot will become a privately held company wholly owned by Picea. It also will delist its shares from the Nasdaq Stock Market.
The shift in ownership could have operational implications for iRobot’s ecommerce and fulfillment strategy. As the company’s primary contract manufacturer, Picea already plays a significant role in producing iRobot’s devices. Ownership by the manufacturer could allow tighter coordination between product design, manufacturing, inventory planning, and delivery — key factors for an ecommerce-led hardware company facing margin pressure and demand volatility.
For ecommerce-first brands like iRobot, bankruptcy carries heightened customer-facing risk because there is limited insulation from disruption. With no large physical retail network to buffer sales, maintaining seamless checkout, reliable delivery and ongoing product support becomes a core requirement for sustaining revenue during restructuring rather than a secondary operational concern.
The company’s focus on uninterrupted digital operations underscores how customer experience has become a balance-sheet asset for connected commerce businesses. App performance, service continuity and post-purchase support are intricately linked to brand value and future cash flow, particularly for companies with large installed bases of connected devices.
iRobot said its claims agent, Stretto Inc., will distribute court notices as required. The company said customers, partners and employees are not required to take any action as a result of the Chapter 11 filing.
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