New York City-based Blue Apron Holdings Inc (NYSE:APRN) said it will be eliminating almost one-quarter of its staff less than six weeks after its initial public offering as the company fights for profitability.
In a filing with the New Jersey Department of Labor and Workforce Development, Blue Apron said it will be jettisoning 1,270 jobs. According to the most recent information, Blue Apron had 5,202 workers. The job losses all come from the company’s Jersey City warehouse facility.
Blue Apron is an e-commerce company that provides ingredient and recipe meal kits. Each week, subscribers receive boxes that contain ingredients and suggested recipes that are cooked by hand using the pre-ordered ingredients. A two-person plan costs about $60.00 per week, while the family plan comes in just under $72.00 per week.
The company also offers “Blue Apron Wine,” a wine monthly delivery service (six 500mL bottles), which can be paired with its dishes. This service will run you $65.99 per month.
The company also sells spices, cooking utensils, cutlery, cookware and bakeware, and ingredients for the pantry, like oil, peppercorn, and salt.
From its inception in August 2012 to March 31, 2017, Blue Apron has delivered over 159-million meals to households across the United States, which represents approximately 25-million paid orders.
Blue Apron’s supposed at-home popularity hasn’t whetted the appetite of Wall Street. Blue Apron went public on June 29, but the markets have not warmed to the company’s stock. Shares are down approximately 40% since then, at around $6.00 per share.
While Blue Apron has been great at generating sales, it doesn’t have a great track record of turning a profit. In 2014, 2015, and 2016, the company reported net revenue of $77.8 million, $340.8 million, and $795.4 million, respectively. This represents growth of 338% from 2014 to 2015 and growth of 133% from 2015 to 2016.
Between 2014 and 2016, the company lost more than $130.0 million.
In the three months ended March 31, 2017, Blue Apron generated revenue of $244.8 million, a 42% increase over the $172.1 million recorded in the first quarter of 2016. In the three months ended March 31, 2017, Blue Apron lost $52.2 million.
The company will be announcing its second-quarter results on August 10. But recent actions from head office do not bode well for investors.
In a June 28 regulatory filing with the United States Securities and Exchange Commission, Blue Apron said, “We have a history of losses…we may not be able to achieve or maintain profitability, and we may incur significant losses for the foreseeable future.
Meanwhile, in July, one month after going public, Blue Apron made changes to its executive team. Specifically, the company announced that Chief Operating Officer and co-founder Matthew Wadiak was stepping down, though he will remain as a senior advisor.
“W.A.R.N Notice – August 2017” New Jersey Department of Labor and Workforce Development, last accessed August 4, 2017.
“Blue Apron,” Blue Apron Holdings Inc, last accessed August 4, 2017.
“Blue Apron Amendment No. 4 to Form S-1,” Securities and Exchange Commission, June 28, 2017.
“Blue Apron Holdings, Inc. Announces Changes to Executive Leadership Team,” Blue Apron Holdings Inc, July 25, 2017.