Blue Apron Holdings Inc. is exploring “a broad range of strategic alternatives” that include raising more money from investors or putting itself up for sale, the meal-kit retailer announced this week.
The company, which ranks No. 98 in the 2019 Digital Commerce 360 Top 1000, made the announcement in combination with the release of its financial results for the fourth quarter and year ended Dec. 31. Blue Apron also says it will close its Arlington, Texas, fulfillment center and consolidate its production volume into its New Jersey and California facilities.
In a Feb. 18 conference call with analysts, Blue Apron CEO Linda Findley Kozlowski said alternatives “could include, among other things, a strategic business combination, a capital raise through the public or private markets, a transaction that results in private ownership or sale of the company, or some combination of these,” according to a Seeking Alpha transcript.
Kozlowski joined the company as CEO effective April 8, replacing Brad Dickerson. She previously was chief operating officer at Etsy Inc.
Dickerson, who joined the company as chief financial officer in 2016 and was named CEO a year later, resigned to pursue other opportunities, according to a company statement. Ilia Papas, Blue Apron’s co-founder and head of technology, also left the company about the same time.
Selling meal kits is a tough business. Data from Digital Commerce 360 and Bizrate Insights shows that 54% of consumers surveyed cancel their meal-kit delivery because it’s too expensive. Consumers also say that they canceled the service because they were wasting too many deliveries (19%), and it took too long to prepare the meals delivered (15%).
Highlights of Blue Apron’s financial results include the following:
- Net revenue for full-year 2019 decreased 31.8% to $454.9 million from $667.6 million for full-year 2018. Blue Apron attributed the drop primarily by a decrease in customers as Blue Apron “remained focused on efficient marketing channels and consumers with high affinity and retention within its direct-to-consumer platform,” the company says.
- Blue Apron’s net loss for full-year 2019 was $61.1 million, down roughly 50% compared with a net loss of $122.1 million for the previous year.
- For the fourth quarter, net revenue decreased 33% year over year to $94.3 million in the fourth quarter of 2019, compared with the fourth quarter of 2018. Blue Apron says the decrease reflects its “deliberate reduction in marketing spend while focusing on marketing efficiency and targeting high-affinity consumers.”
- The net loss for the quarter was $21.9 million, down almost 8% compared with a net loss of $23.7 million during the year-ago fourth quarter.
“We continue to believe that we have the right strategy to drive our resumption of growth as we work to launch additional new capabilities and test new product offerings,” Kozlowski says in the company’s statement about its financial results. “Our strategic alternatives process, together with our cost optimization initiatives, is intended to best position the company for the future, including to support our growth strategy.”