After warning last month that it could declare bankruptcy, eGrocer Boxed has made it official.
“This was an incredibly difficult decision, and one that we reached only after carefully evaluating and exhausting all available options,” Chieh Huang, Boxed’s co-founder and CEO, said in a news release.
He added that the company was “incredibly excited to watch the Spresso business continue under new ownership.”
The news release says Boxed will look for ways to streamline its operations, “including an efficient and orderly wind-down of its remaining retail business.” The company does not expect Spresso customers to experience any disruption of their services.
Boxed, which provides bulk eCommerce grocery and retail services, said in a filing last month with the Securities and Exchange Commission (SEC) that it had been considering bankruptcy protection while also “soliciting proposals for the sale of all or substantially all of its assets.”
As PYMNTS noted at the time, the company’s struggles weren’t new. It began the year announcing the possibility of a sale, and said it was looking for ways to obtain fresh capital. Soon after, Boxed secured $20 million in new funding, and it seemed for a moment that its prospects had brightened.
Then came the collapse of Silicon Valley Bank, where Boxed “held the majority of its cash deposits and other liquid instruments,” per the SEC filing.
Boxed went public in 2021 through a special purpose acquisition company (SPAC) merger. Its stock price has fallen 98% in the last year.
Recent months have been tough for online grocers, facing new pressure from rising prices and worsening economic conditions, with many ultrafast grocers shutting down or drastically scaling back their businesses.
Late last year, soon after meal delivery company Freshly was offloaded by former owner Nestlé, the company announced the shuttering of its direct-to-consumer deliveries. Meal kit services Blue Apron and HelloFresh also struggled towards the end of 2022, announcing job cuts.
Yet, online grocery overall continues to grow, according to research by PYMNTS in “ConnectedEconomy™ Monthly Report: The Evolving Digital Daily Edition,” which showed that digital engagement with grocers has risen 27% in the last year.
In addition, the share of digital-only grocery shoppers has increased 36-fold since before the pandemic, from 0.2% to 7.2%, according to data from PYMNTS’ study “Changes in Grocery Shopping Habits and Perception,” which was based on a December survey of more than 2,400 U.S. consumers.