Potential Buyer Falls Through as Longtime Northeast Bakery Operation Plans to Close

Hopes for a potential buyer of Schwebel Baking Co., a popular northeast bakery that announced it was ceasing operations, have faded after the buyer has apparently backed out of the deal.

Talks with a potential buyer have ended and Schwebel’s plans to wind down operations, according to a June 15 report by WKYC-TV in Cleveland, Ohio, during a status conference call with a U.S. District Court judge as part of a Teamsters union lawsuit against Schwebel’s. The suit filed by 10 Teamsters chapters alleges Schwebel’s violated its collective bargaining agreements by announcing its intention to close its two bakeries and outlet stores.

After 120 years of operation, the Youngstown, Ohio, company in late June announced it planned to end operations at its two bakery plants in Youngstown and Hebron, Ohio, by the Fourth of July weekend and expected to initiate a liquidation of its business, which also includes retail bakery outlet stores and distribution centers across Ohio, Pennsylvania and New York.

Another lawsuit against Schwebel’s claims the bakery firm defaulted on a loan and owes nearly $4 million.

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, according to a news release.

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 was unable to execute a viable going-concern sale or secure additional liquidity and investment. After evaluating all available alternatives and considering the company’s financial condition, the board of directors made the difficult decision to wind down operations and pursue a formal liquidation of the business in the coming weeks, according to the release.

Schwebel’s began in 1906 in the family kitchen of Joseph and Dora Schwebel. Forty loaves of bread were delivered door to door each day in a wicker laundry basket.