Schwebel Baking Co. moves ahead with closure after buyer withdraws
The 120 year old bakery will shut down after sale talks ended and financial pressure continued to mount.
USA – Schwebel Baking Co. will move ahead with plans to close its business after discussions with a potential buyer ended without an agreement, bringing the company’s 120 year history closer to its end.
The development came during a status conference linked to a lawsuit filed by several Teamsters union chapters. According to a report by WKYC TV in Cleveland, talks with the potential buyer had ended, leaving the Ohio bakery with no path to continue operating.
Schwebel announced in late June that it would close its bakery plants in Youngstown and Hebron, Ohio, by the Fourth of July weekend before starting the liquidation of its business. The company also plans to close its retail bakery outlet stores and distribution centers across Ohio, Pennsylvania and New York.
The closure marks the end of one of the oldest family owned bakery businesses in the United States. Joseph and Dora Schwebel started the company in 1906 from their family kitchen, where they baked 40 loaves of bread each day and delivered them door to door in a wicker laundry basket.
Schwebel said years of financial and operating pressure led to the decision to shut down the business. The company cited aging production facilities and equipment, high labour and pension costs, and lower demand for traditional bread products as key factors behind its financial position.
“Schwebel’s has faced significant operational and financial constraints for many years, including aging manufacturing facilities and equipment, costly labor contracts and pension obligations, and consumer trends depressing demand for traditional bakery and bread products.”
The company said it explored several options before deciding to close. These included looking for financing, seeking buyers for the business and asking for a temporary delay on some pension payments to keep enough cash for important factory improvements.
“Schwebel’s made comprehensive efforts to explore all financing and strategic alternatives, including the sale of its business and operations, as well as making a request to temporarily defer certain pension obligations to preserve liquidity for essential improvements to the manufacturing facilities.”
The company added that it could not complete a sale that would keep the business operating or secure additional funding. As a result, its board decided to close the company and begin formal liquidation.
The bakery also faces another legal challenge. A separate lawsuit claims Schwebel defaulted on a loan and owes nearly US$4 million (about US$4 million), adding to the financial pressure facing the business as it prepares to end operations.
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