Blue Apron On The Brink? Seeks Funds Or A Sale As It Closes Facility
Meal kit delivery startup Blue Apron was Wall Street’s most promising IPO in 2017. Now it is “evaluating a broad range of strategic options” that could result in an additional money raise, sale, and or even bankruptcy.
“There can be no assurance that the review of strategic alternatives will result in a transaction on a timely basis, or at all, or that any transaction will produce the intended benefits for Blue Apron stakeholders,” the company wrote.
Blue Apron recorded a 30% plunge in sales and -1.66 loss per share for the fourth quarter. The company has been walloped by competition from services like HelloFresh and Amazon Fresh.
Blue Apron outlined in a turnaround plan last August that it would generate new growth and sell more meal kits. The results have yet to be promising.
Last month, the startup told 456 employees at its Arlington, Texas fulfillment center that they would be laid off and operations shuttered in the near term.
Investors aren’t convinced that Blue Apron can survive any longer as the economy rapidly slows, and consumers are starting to be more frugal ahead of the next recession.
Blue Apron’s CEO Linda Kozlowski warned Tuesday that raising additional funds or the sale of the company might not succeed, suggesting that bankruptcy could be imminent.
“We can’t promise that strategic options will actually happen,” Kozlowski said. “When we refer back to the August growth plan, we feel we have the right strategy. We’re already seeing progress on the products side, but we do feel that we require investment in order to really drive the strategy.”
And who could’ve seen this coming? ZeroHedge readers, of course…
We noted last fall the music stopped playing with the implosion of WeWork. Investors have had enough with money-losing companies that have no plans on profitability but only survivability on cheap credit.
The next big move could be a return to value as uncertainly plagues the global economy, and investor appetites change. As for Blue Apron, the startup is likely to fail.
Wed, 02/19/2020 – 11:36
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