A grocery brand now files for an unexpected bankruptcy after reporting significant operating losses in 2022 and 2023.
Takeoff Technologies offers grocery automation solutions and was created with the grocer and the shopper in mind.
“Grocery is a complex industry, and bringing groceries online presents a number of unique challenges,” the company states on its website.
“Takeoff’s micro fulfillment solution is so efficient that we can operate at a lower cost-to-serve than a traditional brick & mortar store.
This has the power to unlock cheaper grocery prices and democratize access to quality, nutritious foods around the world.
We are passionate about using innovation to remove barriers.”
The Waltham, Massachusetts debtor and five affiliates on May 30 filed their petition in the U.S. Bankruptcy Court for the District of Delaware after reporting significant operating losses in 2022 and 2023 and owing about $12.9 million in trade debt and unliquidated, unsecured claims.
The company did not report any secured or funded debt obligations.
The debtor sells, maintains and supports equipment and software needed to operate micro-fulfillment centers, which are small, automated robotic warehouses in grocery stores or near end-shoppers, the declaration said.
Takeoff Technologies also employs about 300 workers at dozens of sites in eight countries on four continents.
The company said it plans to seek a sale of one or more of its assets through a marketing process while continuing to operate through approval of up to $9.6 million in debtor-in-possession financing from a consortium of its customers, including Woolworths Group, Albertson’s Cos. (ACI) , Village Super Market, ShopRite of Hunterdon County and Inserra Supermarkets, according to a declaration by the debtor’s Chief Restructuring Officer Brett M. Anderson of Huron Consulting Services.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
An essential company now files a surprising bankruptcy after miscalculating demand for its inventory after the Covid-19 pandemic.
Supply Source Enterprises, a leading provider of branded and private label cleaning products and personal protective equipment, on May 21 filed for Chapter 11 protection to seek a sale of its assets.
Supply Source brands include The Safety Zone and Impact Products.
The Guilford, Connecticut debtor listed $50 million to $100 million in assets in its petition and $180 million in funded debt, which includes $80 million owed on a term loan credit facility, $60 million owed on an asset-based loan, and about $40 million in unsecured debt.
Before the Covid-19 pandemic, which generated huge demand for cleaning supplies and personal protective equipment in 2020, Supply Source had been consistently profitable with stable single-digit growth, according to a declaration from the debtor’s Chief Restructuring Officer Thomas Studebaker.
Once the pandemic hit in 2020, the debtor had substantial growth due to high demand for safety, hygiene and sanitation products
The debtor reported adjusted Ebitda of $93 million in 2020 which was nearly a 300% increase over the previous year.
However, the company’s financial performance deteriorated in subsequent years.
Based on the unprecedented demand in 2020, the company commissioned an industry study in early 2021 that concluded that the Covid-19 pandemic would fundamentally change the cleaning supplies and protective equipment industry and market for its products.
The study also estimated that the company’s Covid-related growth would likely be sustained through 2024.
In contemplation of continued customer demand at elevated prices, based on the study’s data, the debtor increased purchases of inventory even though the costs were higher due to supply chain constraints during the pandemic.
Despite the study’s assurance that growth would be sustained for years, the pandemic’s positive effect on the market faded by the end of 2021 and demand for PPE decreased to normal rates, reports TheStreet.
The reduction in demand led to large amounts of excess inventory that the company could not sell in the same quantities and prices.
The excess inventory forced the debtor to secure additional storage space, which increased storage costs.
These factors tightened the company’s liquidity and led to a decline in annual revenue in 2023 by 26% from 2022, resulting in a negative 2023 Ebitda of $13 million.
The debtor’s liquidity issues led to it being overdrawn on its asset-based loan facility by $30 million.
The ABL lender in February 2024 swept the debtor’s bank accounts, further impacting the company’s financial distress.
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Also Read: This Massive Mall Retailer Is Now Closing In California
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