Blue Apron Continues to Drive its Core
Direct-to-Consumer Business and Plans to Expand its Product
Selection; Deal Expected to Create Efficiencies Towards Blue
Apron’s Goal to Reach Profitability
Blue Apron to Receive up to $50 Million
Blue Apron (NYSE: APRN) today announced plans for a long-term
operations and logistics relationship with FreshRealm, a leading
provider of fresh meals to top retailers nationwide, that would see
the business shift to an asset-light model. The companies have
signed a non-binding letter of intent for up to $50 million payable
to Blue Apron for the transfer of its operational infrastructure,
as well as when transition, efficiency and product milestones are
met.
Blue Apron plans to continue to drive its core
direct-to-consumer business, including the creation and marketing
of its product, customer data, customer support and consumer
technology. The company does not expect changes to its existing
revenue streams as a result of this relationship.
By shifting to this asset-light model, Blue Apron plans to focus
on further growing its strong brand and delivering the high-quality
products its customers have come to expect. The company also plans
to add new convenience product options for a broader consumer base
in the future.
Upon closing, and together with additional streamlining efforts
Blue Apron plans to make, the transaction is expected to enhance
the company's balance sheet and drive additional corporate product,
technology, general and administrative efficiencies alongside the
asset-light model to support the company’s goal of
profitability.
“Over a decade ago, Blue Apron pioneered the U.S. meal kit
industry and remains a leader in offering delicious, chef-curated
meals to thousands of customers every week. As we continue to
evolve, we believe there is an opportunity to simplify our direct
role in the fulfillment of our product, allowing us to focus on
growing our brand, our customer base and revenue in the long-term,”
said Linda Findley, Blue Apron’s President and Chief Executive
Officer. “We expect that this will allow us to focus all our
efforts on providing even greater innovation and convenience to our
customers as we remain at the forefront of culinary trends. We are
confident that we can continue to deliver the same product our
customers know and love, while increasing efficiency and
accelerating our path to profitability.”
The proposed transaction builds on Blue Apron’s current
relationship with FreshRealm, which is the manufacturer of the
company’s popular line of Heat & Eat meals. Once the
transaction closes, Blue Apron expects to be able to accelerate
product innovation with faster development and commercialization.
Blue Apron also expects to be able to leverage FreshRealm’s
expertise, along with their full product capabilities of
ready-to-heat and ready-to-cook meals, and other offerings. Over
time, this relationship is also expected to open additional sales
channels.
FreshRealm’s Founder and CEO, Michael Lippold, added, “Today’s
meal industry is focused on profitability and expanded product
offerings. From the beginning, FreshRealm has believed this is best
achieved through organizations staying within their core
competencies. This announcement positions Blue Apron to focus on
the customer experience; while FreshRealm continues on the path to
be the leading platform to support retailers across multiple
channels with a broad and efficient solutions offering.”
At the closing of the transaction, Blue Apron would transfer its
operational infrastructure to FreshRealm, including fulfillment
centers, equipment, know-how and personnel. In consideration of the
transaction, Blue Apron expects to issue to FreshRealm warrants in
an amount equal to 19.9% of the company’s then-outstanding common
stock with an exercise price of $.01 per share on the closing date
of the transaction.
The parties intend to sign definitive agreements and close the
transaction on or about June 9, 2023.
About Blue Apron
Blue Apron’s vision is Better Living Through Better Food™.
Launched in 2012, Blue Apron offers fresh, chef-designed meals that
empower home cooks to embrace their culinary curiosity, challenge
their abilities in the kitchen and see what a difference cooking
quality food can make in their lives. Blue Apron is focused on
bringing incredible recipes to its customers, deepening its
commitment to its employees, continuing to reduce food and
packaging waste, and addressing its carbon impact. Visit
blueapron.com to learn more.
Forward Looking Statements
This press release includes statements concerning Blue Apron
Holdings, Inc. and its future expectations, plans and prospects
that constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. For this
purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. In
some cases, you can identify forward-looking statements by terms
such as "may," "should," "expects," "plans," "anticipates,"
"could," "intends," "target," "projects," "contemplates,"
"believes," "estimates," "predicts," "potential," or "continue," or
the negative of these terms or other similar expressions. The
forward-looking statements in this press release are only
predictions. Blue Apron has based these forward-looking statements
largely on its current expectations and projections about future
events and financial trends that it believes may affect its
business, financial condition and results of operations. These
forward-looking statements speak only as of the date of this press
release and are subject to a number of risks, uncertainties and
assumptions including, without limitation, the ability of the
company to enter into definitive agreements with FreshRealm in
connection with the transactions described in this press release by
June 9, 2023, if at all; the sufficiency of the company’s cash
resources and its ability to continue to operate as a going concern
in the event that prior to the middle of June 2023, (i) the
FreshRealm transaction does not close, (ii) the company is unable
to obtain sufficient additional funding or raise additional capital
including through its February 2023 at-the-market offering or
otherwise, (iii) RJB Partners, LLC, and certain other affiliates of
Joseph N. Sanberg do not fund their remaining respective
obligations under the $56.5 million private placement and $12.7
million gift card transaction, (iv) the company is unable to
dispose of some or all of the pledged securities securing the RJB
private placement obligation in a private or other sale and receive
cash proceeds sufficient to meet its near-term obligations, and (v)
the company is unable to realize the anticipated benefits from
identified, or to be identified, expense reductions or incur
unforeseen additional cash expenses; the company’s ability to
successfully execute its business without its fulfillment and
production assets; the ability of the company to successfully and
efficiently transition its fulfillment and production assets to
FreshRealm; the ability of FreshRealm to continue to fulfill the
company’s meal-kit products in a manner consistent with the
company’s brand standards, if at all; the company’s ability to
achieve the anticipated benefits of the FreshRealm transaction for
the company’s stockholders; the company’s ability, including the
timing and extent, to successfully support the execution of its
strategy; the company’s ability to cost-effectively attract new
customers and retain existing customers (including on the one hand,
its ability to execute its marketing strategy with a reduced
marketing budget, or on the other hand, its ability to sustain any
increase in demand the company may experience), and its ability to
continue to expand its product offerings and distribution channels;
the company’s ability to sustain any increase in demand and/or
ability to continue to execute operational efficiency practices
announced in December 2022, including managing its corporate
workforce reduction costs and the impact of its workforce reduction
on executing its strategy; the company’s expectations regarding,
and the stability of, its supply chain, including potential
shortages, interruptions or continued increased costs in the supply
or delivery of ingredients to the company, or following the Fresh
Realm transaction, to FreshRealm, and parcel and freight carrier
interruptions or delays and/or higher freight or fuel costs, as a
result of inflation or otherwise; the company’s ability to respond
to changes in consumer behaviors, tastes and preferences that could
lead to changes in demand, including as a result of, among other
things, the impact of inflation or other macroeconomic factors, and
to some extent, long-term impacts on consumer behavior and spending
habits; the company’s ability to attract and retain qualified
employees and personnel in sufficient numbers; the company’s
ability to effectively compete; the company’s ability to maintain
and grow the value of its brand and reputation; any material
challenges in employee recruiting and retention, any prolonged
closures, or series of temporary closures, of one or both
fulfillment centers it operates or to be operated by FreshRealm,
supply chain or carrier interruptions or delays, and any resulting
need to cancel or shift customer orders; the company’s ability to
achieve its environmental, social and corporate governance goals on
its anticipated timeframe, if at all; the company’s ability, and
following the FreshRealm transaction, the company’s reliance on
FreshRealm, to maintain food safety and prevent food-borne illness
incidents and its susceptibility to supplier-initiated recalls; the
company’s ability to comply with modified or new laws and
regulations applying to its business, or the impact that such
compliance may have on its business; the company’s vulnerability to
adverse weather conditions, natural disasters, wars, and public
health crises, including pandemics; the company’s ability to
protect the security and integrity of its data and protect against
data security risks and breaches; the company’s ability to obtain
and maintain intellectual property protection; and other risks more
fully described in the company’s Annual Report on Form 10-K for the
year ended December 31, 2022 filed with the SEC on March 16, 2023
and the company’s Quarterly Report on Form 10-Q for the quarter
ended March 31, 2023 filed with the SEC on May 4, 2023 and in other
filings that the company may make with the SEC in the future. The
company assumes no obligation to update any forward-looking
statements contained in this press release, whether as a result of
any new information, future events, or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20230515005924/en/
Muriel Lussier Blue Apron muriel.lussier@blueapron.com
Blue Apron (NYSE:APRN)
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