Blue Apron weighs sale amid waning appetite for meal kits
Company needs fresh capital to reach new customers, CEO says
Blue Apron Holdings Inc. said it is exploring strategic options including putting itself up for sale, after the meal-kit maker reported more customer defections and another quarterly loss.
The New York-based company said Tuesday that it is also considering merging its meal-kit business with other companies and raising more money. Shares in Blue Apron climbed nearly 12 percent after hours to $4.37.
"It really is about getting more reach out there and leveraging the exceptional brand that Blue Apron still has to develop new customers," Chief Executive Linda Kozlowski said in an interview. She declined to comment further on the status of Blue Apron's strategic review.
CLICK HERE TO READ MORE ON FOX BUSINESS
Blue Apron quickly gained popularity after it started signing up customers online for its kits of pre-apportioned ingredients and recipes in 2012. Once valued at nearly $2 billion with more than a million users, Blue Apron has struggled to maintain its footing since going public in 2017. The company said Tuesday that its customer count fell to 351,000 for the fourth quarter and recorded a loss for the period.
|APRN||BLUE APRON HOLDINGS||0.75||-0.02||-2.84%|
|KR||THE KROGER CO.||49.05||+0.55||+1.13%|
Newer players offering cheaper or more niche meals have siphoned off customers. Rival HelloFresh SE surpassed Blue Apron as the biggest U.S. provider of meal kits in 2018. Grocers Kroger Co. and Albertsons Cos. expanded their own offerings of prepared foods by acquiring meal-kit companies.
BLUE APRON LATEST TO SUFFER IN TOUGH MEAL-KIT MARKET
Blue Apron has trimmed marketing in recent quarters as it attempted to curtail losses stemming in part from operational problems at a warehouse in New Jersey built to prepare and package its kits.
The company has also pursued partnerships with plant-based protein maker Beyond Meat Inc. and WW International Inc., owner of Weight Watchers, to try to appeal to diners looking for a particular kind of meal.
Kozlowski, who joined the company last April from e-commerce startup Etsy Inc., said Blue Apron needs fresh capital to draw in new customers including through more marketing.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The company on Tuesday said it generated $94.3 million of sales and a net loss of $21.9 million in the fourth quarter, falling short of expectations. Blue Apron said it had 351,000 customers for the three months ended Dec. 31, down from 557,000 the year earlier. It also said it would close its facility in Arlington, Texas, and consolidate production at fulfillment centers in New Jersey and California.