iRobot, the manufacturer of Roomba robot vacuums, has filed for bankruptcy following a period of financial challenges. The company is set to be acquired by its primary manufacturer, Shenzhen Picea Robotics, based in China. This acquisition is anticipated to facilitate the continued operation of iRobot products.
Bankruptcy Filing and Acquisition
iRobot cited several factors contributing to its bankruptcy filing, including significant debt obligations, tariff costs, and increased competition. The company's bankruptcy filing indicates it owes $3.4 million in unpaid tariffs to U.S. Customs and Border Protection. Additionally, iRobot reported an approximate $100 million debt to Shenzhen Picea Robotics.
Under the terms of the bankruptcy arrangement, iRobot will transition to a private entity and become integrated within Picea Robotics. Shenzhen Picea Robotics has stated its intent to ensure the continued functionality of iRobot devices.
Financial Challenges and Regulatory Scrutiny
In recent years, iRobot has faced financial difficulties, reporting consistent financial losses. The company's U.S. revenue declined by 33% in its most recent quarter. In March, iRobot had issued warnings about potential bankruptcy, citing concerns related to consumer demand, competitive dynamics, and tariffs.
The company encountered increased competition from international manufacturers offering smart vacuums at lower price points. Most Roomba units are produced in Vietnam, which led iRobot to incur import fees under previous U.S. trade policies, contributing to the outstanding tariff obligations.
A proposed $1.4 billion acquisition by Amazon was withdrawn last year following regulatory reviews by European and U.S. competition authorities. This termination left iRobot with a $200 million loan, which had been secured to maintain operations during the merger review period.
Company History
iRobot was founded in 1990 by researchers from the Massachusetts Institute of Technology. The company initially developed devices for various applications, including military support, exploration of the Great Pyramid of Giza, and oil spill monitoring in the Gulf of Mexico. It later expanded its focus to consumer products, introducing home cleaning devices such as the Roomba and devices for pool cleaning.
Shenzhen Picea Robotics Profile
Shenzhen Picea Robotics, iRobot's primary manufacturer, is based in China. Picea Robotics manufactures its own brand of household devices, "3i," and its website lists associations with other brands such as Shark and Anker, which markets Eufy vacuums.