Loss-making Blue Apron is considering a number of strategic options to return the US-based meal-kit delivery firm to profit, including a possible de-listing.
The New York-listed business made the announcement in conjunction with its full-year results to the end of December, which showed bottom-line losses narrowed to US$61.1m, from a $122.1m loss a year earlier. Its revenues dropped 32% to $454.9m.
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Blue Apron is also planning to close one of its facilities, located in Arlington, Virginia.
Chief executive Linda Findley Kozlowski, who became CEO last April after Brad Dickerson resigned, reiterated the company’s new three-pronged strategy: “engaging more consumers that have our best customer characteristics; offering greater menu choices and flexibility in our products and services; and scaling our marketing efficiently.”
However, Blue Apron said it is “evaluating a range of strategic alternatives to maximise shareholder value”, which could include partnering with another business, raising capital through a public or private share offering, “a transaction that results in private ownership or sale of the company”, or a combination of those options.
“As we discussed when we laid out our strategy in August, we are simultaneously optimising our operations and maintaining fiscal discipline to provide us with a strong foundation for future growth,” Kozlowski said. “We continue to believe that this is the right strategy to resume growth in the business and to position Blue Apron as the trusted solution for home cooks seeking quality, discovery and variety in their culinary experiences.
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By GlobalData“That said, while we continue to launch additional capabilities and test new product offerings, it will continue to take investment to realise the benefits of these efforts as we are working to reverse negative trends from prior years.”
As part of the strategy to return the business to growth, Blue Apron will close the Arlington plant and transfer production to its other sites in Linden, New Jersey, and Richmond, California. The move is expected to create annual savings of $8m, along with a “neutral-to-positive margin impact”.
However, the decision will impact 240 workers based at the Arlington plant, although Blue Apron said it expects to add 140 new roles across the other two sites.
“It’s imperative that we constantly examine the business and redirect resources to grow our revenue and customer base, while continuing to provide a high-quality product, and this action reflects another critical step we’re taking to do just that,” Kozlowski said.
Elsewhere in the earnings, the loss in adjusted EBITDA shrank to $8.4m, compared to a previous loss of $61.4m. Earnings per share remained negative too, at $4.67 versus a $9.51 loss a year earlier.
Tim Bensley, Blue Apron’s chief financial officer, provided an outlook for the current financial year.
“We continue to expect net revenue to improve on a sequential quarter-over-quarter basis, while we focus on strengthening our customer base in our seasonally high period of the year,” he said.
The company expects a first-quarter net loss of $22m to $26m, inclusive of the Arlington closure, and an adjusted EBITDA loss of $5m to $7m.
