Apartment-style accommodation provider Sonder Holdings is to wind down operations as it prepares to file for Chapter 7 bankruptcy in the US and liquidate its holdings.
The company’s announcement came one day after Marriott International terminated its licensing agreement with Sonder and removed all Sonder’s inventory from its distribution channels.
Sonder said in addition to the Chapter 7 process it would initiate insolvency proceedings in the "international countries in which it operates". Sonder has properties in 37 cities in nine countries, including London, Paris, Barcelona, Madrid, Milan and Rome, and would provide further information on the wind-down "in due course".
In a statement, Sonder said it had “faced severe financial constraints arising from, among other things, prolonged challenges in the integration of the company’s systems and booking arrangements with Marriott International”.
Sonder said it “made comprehensive efforts to evaluate all financing and other strategic alternatives, including a sale of its business and operations, to improve its financial condition". But it was unable to “execute a viable going concern transaction for its business and operations or obtain additional liquidity”.
Sonder's financial position in recent years was challenged by high costs and debt, with last year’s 20-year licensing deal with Marriott offering something of a lifeline. But that agreement was terminated on Sunday when Marriott pulled out due to Sonder’s “default”.
“We are devastated to reach a point where a liquidation is the only viable path forward,” said Sonder’s interim CEO Janice Sears. "Unfortunately, our integration with Marriott International was substantially delayed due to unexpected challenges in aligning our technology frameworks, resulting in significant, unanticipated integration costs, as well as a sharp decline in revenue arising from Sonder’s participation in Marriott’s Bonvoy reservation system.”