- Blue Apron’s board of directors is exploring strategic alternatives, including a sale, merger, raising public or private capital or some combination of transactions, the company announced in its Q4 earnings report. Additionally, Blue Apron shared plans to close a facility in Arlington, Texas, and shift production to larger centers in Linden, New Jersey, and Richmond, California.
- Blue Apron saw net revenue decrease by 33% to $94.3 million in Q4, down from $140.7 million in Q4 2018. The meal kit company attributed the change to reduced marketing spend and a focus on high-affinity customers who could bring more long-term revenue.
- The company improved average revenue per customer in Q4, with a 6% increase from the same period in 2018. It also saw a 7% increase in orders per customer from the year prior.
While Blue Apron has struggled for a long time, its Q4 earnings reveal that its willing to take more dramatic steps to try to increase shareholder value and try to woo back investors who have lost confidence in the company.
"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," CEO Linda Findley Kozlowski said in a statement.
Blue Apron did not provide further comment on possible buyers or interested companies, and Kozlowski said on the earnings call the board has not set a timeline for the process.
Industry talk of mergers or acquisitions for Blue Apron have been ongoing since the company’s stock first fell below $1 at the end of 2018. While some have suggested the company could be acquired by another meal kit maker, a grocery retailer or a private equity company, no real candidates have come forward.
The company could consider a sale to a grocer like other struggling meal kit companies have in the past. This includes Purple Carrot, which was purchased by a Japanese e-grocer in 2019, and Plated, which Albertsons acquired in 2017. Albertsons, however, shut down its business completely in late 2019 and last month announced it will bring a refreshed version back to stores.
Blue Apron has been trying to execute a turnaround strategy since Kozlowski stepped into the executive role last April. She has noted a three-point approach that includes cutting back on marketing investments and pursuing high-value customers, streamlining operations and expanding Blue Apron’s reach through new partnerships and products.
Some of the latest initiatives to try to boost its business and customer retention include new meal prep kits, which Blue Apron announced last week. The kits are currently available to customers on the East Coast and Mid-Atlantic and will roll out more widely later this year. The company has also continued a partnership with WW (formerly Weight Watchers) to indicate WW-approved recipes with a special badge.
However, experts aren't sure a turnaround is in the cards for the meal kit company as shares continue to drop and they expect slower growth than the larger market, according to Yahoo Finance. Since its disastrous IPO in 2017, not much has improved despite its efforts.