Roomba maker iRobot files for bankruptcy after pressure from Donald Trump's tariffs
Shenzhen-based Picea Robotics – its lender and main supplier – will acquire all of iRobot’s shares
Roomba maker iRobot has filed for bankruptcy in the US after the robotic vacuum cleaner firm came under pressure from cheaper rivals and Donald Trump's tariffs.
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US-listed iRobot said on Sunday it had filed for Chapter 11 bankruptcy as part of a restructuring that will see Shenzhen-based Picea Robotics – its lender and main supplier – acquire all of iRobot’s shares.
In bankruptcy documents, iRobot said: “The company has faced challenges arising from external market conditions including increased competition in the industry, rising inflation and expansive tariffs placed on countries where the robot products have been historically manufactured and produced.”
Trade tariffs imposed by US President Trump on goods entering the US from overseas has hiked costs to many firms, including iRobot, which need imports for product manufacturing.
This follows the collapse in January last year of Amazon’s planned takeover of iRobot in the face of opposition from EU competition regulators.
Amazon had agreed a proposed 1.7 billion US dollar (£1.3 billion) acquisition of iRobot in August 2022, but the European Commission said the deal could harm competition for iRobot’s rivals on Amazon’s online marketplace, particularly in France, Germany, Italy and Spain.
The investigation found it had concerns that Amazon could reduce the visibility of competitor products on its marketplace if the deal went through.
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Gary Cohen, chief executive of iRobot, said: “Today’s announcement marks a pivotal milestone in securing iRobot’s long-term future.
“The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers and partners.
“Together, we will work to continue advancing the industry-leading Roomba robots and smart home technologies that have defined the iRobot brand for more than three decades.
“By combining iRobot’s innovation, consumer-driven design, and research and development with Picea’s history of innovation, manufacturing and technical expertise, we believe iRobot will be well equipped to shape the next era of smart home robotics.”
Massachusetts-based iRobot has been knocked by competition from cheaper Chinese rivals, as well as surging US tariffs, which have seen import levies increased to 46% on goods from Vietnam, where most of its products are made for the US.
The firm launched its first Roomba robot vacuum in 2002 and has since gone on to sell millions of robots worldwide.It is best known for its robotic vacuums, but also develops smart-home technologies and advanced concepts in cleaning, mapping and navigation.
Picea is a global manufacturer and service provider of robotic vacuum cleaners, with research and development and manufacturing facilities in China and Vietnam.
It has has some 7,000 employees globally and has sold more than 20 million robotic vacuum cleaners.