JPMorgan eyeing buyers for FreshDirect: Report
JPMorgan is reportedly eyeing buyers for FreshDirect, indicating they want out of their investment into the online food retailer recently plagued by delivery problems, according to a new report.
While the grocer's largest investor looks for potential buyers, Amazon and Walmart, both invested in the grocery business, recently vetted FreshDirect’s financial and performance data for the third time, according to the New York Post citing sources familiar with the matter.
In 2016, Fresh Direct LLC, which serves residents and offices throughout the New York City metropolitan area, received a $189 million in an investment round led by JPMorgan Asset Management.
The company was once seen as ruling the online grocery business before competition within grocery e-commerce proliferated.
Walmart did not immediately return FOX Business' request for comment. Amazon and JPMorgan declined to comment in regard to the matter.
Walmart and Amazon have been looking into FreshDirect for months, according to The Post who cited a former FreshDirect executive. However, the former executive told The Post the delay in action is likely because they are “waiting for FreshDirect’s valuation to go down further.”
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The news comes in the wake of the company having to address a barrage of problems stemming from the company's move from its distribution center in Long Island City to the Bronx.
In September, FreshDirect apologized to customers after being inundated with delivery problems that occurred during the transition, The Wall Street Journal reported.
The transition to its Bronx warehouse was supposed to help improve the company's logistics, but it didn't go “as smooth as planned” the Journal reported.
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Groceries have been slower to migrate online in comparison to retail goods. Online grocery sales make up 3% of the $800 billion food retail market, according to a recent report by Deutsche Bank. That’s expected to climb to 12% by 2025 as services grow and stores offer more options, like online ordering for pickup.
The Associated Press contributed to this report.