Blue Apron Lays Off 10% of Corporate Workforce
Blue Apron, one of the pioneers in the meal-kit sector, has struggled to increase sales and keep customers in recent years.
Photo:
Daniel Acker/Bloomberg News
Blue Apron Holdings Inc.
APRN -0.54%
said it would lay off about 10% of its corporate workforce and cut spending, as the meal-kit company seeks to streamline operations.
The job cuts are expected to cost about $1.2 million in severance payments and other expenses, the company said, and are part of as much as $50 million worth of reductions Blue Apron said it can make in 2023. The company’s shares, which are down about 90% this year, fell about 8% on Thursday.
New York-based Blue Apron, one of the pioneers in the meal-kit sector, has struggled to increase sales and keep customers in recent years. Competitor
HelloFresh SE
HFG -1.71%
surpassed Blue Apron as the biggest U.S. provider of meal kits in 2018, while newer entrants have focused on specialized food such as plant-based meals.
Blue Apron and other meal-kit makers got a surge in demand for their products at the start of the pandemic, but that boom has faded as restaurants and other businesses reopened. To reach more customers, Blue Apron has expanded into offering breakfast and snacks, and started selling its products on
Amazon.com Inc.
The company in its quarterly report last month estimated that it had about 323,000 customers, compared with more than one million customers in 2017.
Industry analysts have said that meal kits often are more expensive than preparing meals using groceries and that inflation is putting pressure on meal-kit suppliers. Marketing remains costly for meal-kit companies that use discounts to draw in new customers, while costs for transportation and packaging are high.
Blue Apron said Thursday that it is working to strengthen its balance sheet and that it is working with financial advisers to evaluate financing and other alternatives. The company said it thinks it has sufficient cash flow to maintain compliance under its minimum-liquidity covenant in the first quarter of 2023.
Blue Apron said it is working to secure funding via a private-placement agreement that the company had previously arranged with an affiliate of
Joseph Sanberg,
a founding investor. Blue Apron said Thursday that it has secured the right to foreclose on pledged collateral from the affiliate, which the company said has so far failed to fund a remaining $56.5 million owed to Blue Apron.
Mr. Sanberg didn’t respond to a request for comment.
Write to Jaewon Kang at [email protected] and Dean Seal at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the December 9, 2022, print edition as ‘Blue Apron Plans Layoffs As Pandemic Boom Fades.’
Blue Apron, one of the pioneers in the meal-kit sector, has struggled to increase sales and keep customers in recent years.
Photo:
Daniel Acker/Bloomberg News
Blue Apron Holdings Inc.
APRN -0.54%
said it would lay off about 10% of its corporate workforce and cut spending, as the meal-kit company seeks to streamline operations.
The job cuts are expected to cost about $1.2 million in severance payments and other expenses, the company said, and are part of as much as $50 million worth of reductions Blue Apron said it can make in 2023. The company’s shares, which are down about 90% this year, fell about 8% on Thursday.
New York-based Blue Apron, one of the pioneers in the meal-kit sector, has struggled to increase sales and keep customers in recent years. Competitor
HelloFresh SE
HFG -1.71%
surpassed Blue Apron as the biggest U.S. provider of meal kits in 2018, while newer entrants have focused on specialized food such as plant-based meals.
Blue Apron and other meal-kit makers got a surge in demand for their products at the start of the pandemic, but that boom has faded as restaurants and other businesses reopened. To reach more customers, Blue Apron has expanded into offering breakfast and snacks, and started selling its products on
Amazon.com Inc.
The company in its quarterly report last month estimated that it had about 323,000 customers, compared with more than one million customers in 2017.
Industry analysts have said that meal kits often are more expensive than preparing meals using groceries and that inflation is putting pressure on meal-kit suppliers. Marketing remains costly for meal-kit companies that use discounts to draw in new customers, while costs for transportation and packaging are high.
Blue Apron said Thursday that it is working to strengthen its balance sheet and that it is working with financial advisers to evaluate financing and other alternatives. The company said it thinks it has sufficient cash flow to maintain compliance under its minimum-liquidity covenant in the first quarter of 2023.
Blue Apron said it is working to secure funding via a private-placement agreement that the company had previously arranged with an affiliate of
Joseph Sanberg,
a founding investor. Blue Apron said Thursday that it has secured the right to foreclose on pledged collateral from the affiliate, which the company said has so far failed to fund a remaining $56.5 million owed to Blue Apron.
Mr. Sanberg didn’t respond to a request for comment.
Write to Jaewon Kang at [email protected] and Dean Seal at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the December 9, 2022, print edition as ‘Blue Apron Plans Layoffs As Pandemic Boom Fades.’
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