UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 13, 2018
Blue Apron Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
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001-38134 |
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81-4777373 |
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(State or Other Jurisdiction |
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(Commission |
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(IRS Employer |
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40 West 23rd Street |
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10010 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
(347) 719-4312
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective November 13, 2018, Jared Cluff ceased to serve as Chief Marketing Officer of Blue Apron Holdings, Inc. (collectively with its subsidiaries and other affiliates, as applicable, the “Company”) and as an employee of the Company.
Item 7.01 Regulation FD Disclosure.
On November 13, 2018, the Company issued a press release regarding certain strategic actions it is taking, or has taken, including a reduction of personnel (as described in Item 8.01 below), to support its strategic priorities. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 7.01.
In accordance with General Instruction B-2 of Form 8-K, the information set forth in or incorporated by reference into this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
On November 13, 2018, the Company implemented a reduction in personnel to support its strategic priorities. This action resulted in a reduction of approximately 4% of the Company’s total workforce across the Company’s corporate offices and fulfillment centers. As a result of this action, the Company expects to incur approximately $1.6 million in employee-related expenses, primarily consisting of severance payments, substantially all of which will result in cash expenditures. The Company expects to incur such expenses during the fourth quarter of 2018.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit |
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Description |
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99.1 |
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Forward-Looking Statements
This Form 8-K includes statements concerning the Company 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. Forward-looking statements in this Form 8-K include, but are not limited to, estimates of employee headcount reductions, expenditures that may be made or costs that may be incurred by the Company in connection with the workforce reduction, and the Company’s expectations regarding its profitability. The Company’s expectations and beliefs regarding these matters may not materialize, and actual results are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could contribute to such differences include the Company’s possible changes in the size and components of the expected costs and charges associated with the workforce reduction; risks associated with the Company’s ability to achieve the benefits of the workforce reduction; risks resulting from the workforce reduction, including, but not limited to, further employee attrition and adverse effects on the Company’s operations; the Company’s anticipated growth strategies; its ability to execute on its multi-product, multi-channel growth strategy; its ability to cost-effectively attract new customers, retain existing customers and increase the number of customers it serves; its amount of indebtedness and ability to fulfill its debt-related obligations; its ability to comply with the covenants in its revolving credit facility; and the risks more fully described in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 filed with the U.S. Securities and Exchange Commission (the “SEC”), the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 to be filed with the SEC and in other filings that the Company may make with the SEC in the future. The forward-looking statements in this Form 8-K are based on information available to the Company as of the date hereof. The Company assumes no obligation to update any forward-looking statements contained in this Form 8-K as a result of new information, future events or otherwise.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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BLUE APRON HOLDINGS, INC. | |
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Date: November 13, 2018 |
By: |
/s/ Benjamin C. Singer |
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Benjamin C. Singer |
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General Counsel and Secretary |
Blue Apron Announces Strategic Actions to Accelerate Path to Profitability in 2019
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Sharpening focus on direct-to-consumer business by prioritizing customer segments with proven affinity and retention, as well as attracting consumers with similar attributes |
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Methodically expanding consumer reach through retail channels and on-demand platforms |
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Streamlining personnel to create a more agile and focused organization, resulting in a headcount reduction of 4% of total workforce |
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Further optimizing fulfillment center network to build on momentum of recently achieved operational efficiencies |
November 13, 2018—NEW YORK, NY—Blue Apron Holdings, Inc. (NYSE: APRN) today announced that the company is taking strategic actions to strengthen its focus on specific areas of opportunity in the business that it believes will accelerate its path to profitability on an adjusted EBITDA basis in 2019.
“The ways in which consumers access meals for various occasions has evolved rapidly with expanded choice and the continued convergence of online platforms and brick and mortar stores. Blue Apron has an established brand and a strong foundation of loyal customers who trust and rely on the quality and convenience of our products. We are taking decisive actions to prioritize our highest-impact opportunities and build a stronger, sustainable business. As a result of these actions now underway, we expect to be profitable on an adjusted EBITDA basis in 2019,” said Brad Dickerson, Chief Executive Officer, Blue Apron. “This included the difficult decision to part ways with valued employees. On behalf of the entire company, I thank these colleagues for their many contributions to the business.”
The immediate organization-wide actions include:
Direct-to-Consumer Business
As Blue Apron expands its product offerings and strengthens its e-commerce platform to deliver a seamless customer experience, the company will prioritize customer segments within the direct-to-consumer business that exhibit certain attributes, including: 1) proven retention; 2) strong affinity for the brand; and 3) high potential to increase engagement with Blue Apron product offerings.
The top 30% of Blue Apron’s customers on a net revenue basis acquired in recent cohorts account for more than 80% of its net revenue from such cohorts in the year after acquisition and had an average payback on the acquisition cost per customer of less than six months. This presents opportunity to deepen engagement with this “best customer” segment and unlock value from consumers with similar attributes. Blue Apron intends to concentrate its innovation and marketing efforts on serving the needs of its best customers and attracting more of them, leveraging its extensive insights into their behaviors, goals, and preferences to customize the customer experience—through product development, brand messaging, and exclusive services—for this valuable segment.
Additionally, Blue Apron will continue to launch prominent brand partnerships and innovate products to enhance its core offering for the lifestyle preferences of this segment. Blue Apron will be reallocating
appropriate resources and marketing spend to support the success of its new and upcoming strategic partnerships, while working to eliminate its investment in customers who are unprofitable to the business.
Channel Expansion
Recognizing that consumers seek to engage with Blue Apron beyond its direct-to-consumer platform, the company continues to expand the reach of its brand and products by meeting new segments of consumers on their terms through targeted retail channels and on-demand platforms. Strategic partnerships are an important component of Blue Apron’s methodical channel expansion, enabling the company to scale its retail and on-demand business.
Most recently, Blue Apron announced a strategic partnership with Jet.com to make available same-day or next-day on-demand delivery of a rotating selection of its products to millions of households across the New York City metropolitan area.
Leveraging its consumer insights, Blue Apron designed its retail and on-demand offerings for consumers who desire a high-quality meal solution that can be prepared in 30 minutes or less. The company intends to build on this competency, creating new products designed to meet the specific needs of this consumer segment for various retail channels and on-demand platforms.
Organizational Transformation
To create a more nimble, focused organization and better align internal resources with the company’s strategic priorities, Blue Apron streamlined its personnel today, resulting in a reduction of approximately 4% of its total workforce. As a result of this action, Blue Apron expects to incur employee severance charges and other exit costs of approximately $1.6 million in the fourth quarter and generate annual savings in personnel expenses of approximately $16 million in 2019.
Operational Optimization
Continued optimization of Blue Apron’s operational capabilities are expected to drive further COGS efficiencies and propel the business forward, with multiple initiatives underway in fulfillment processes, labor management, and sourcing utilization. The company continues to leverage automation technology to realize additional efficiencies.
“We are challenging ourselves to think differently about the business. While our strategic priorities—evolving and expanding our product portfolio, enhancing our overall customer experience, and entering new retail and on-demand channels—remain consistent, the brand and product initiatives we are pursuing within each of these pillars will be driven by a disciplined and deliberate focus on consumers who have the attributes of our best customers,” Dickerson continued. “We expect this focus to create a more efficient business, as well as increase key customer metrics, including order rate and revenue per customer. We believe this strategic focus will have a meaningful and positive impact on our current and future customers and deliver value to our shareholders.”
About Blue Apron
Blue Apron’s mission is to make incredible home cooking accessible to everyone. Launched in 2012, Blue Apron is reimagining the way that food is produced, distributed, and consumed, and as a result, building a better food system that benefits consumers, food producers, and the planet. Blue Apron has developed an integrated ecosystem that enables the Company to work in a direct, coordinated manner with farmers and artisans to deliver high-quality products to customers nationwide at compelling values.
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. 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 Company’s anticipated growth strategies, including its decision to prioritize customer segments within the direct-to-consumer business; the Company’s ability to achieve the benefits associated with the workforce reduction; risks resulting from the workforce reduction, including, but not limited to, further employee attrition and adverse effects on the Company’s operations; the Company’s ability to execute on its multi-product, multi-channel growth strategy; its expectations regarding competition and its ability to effectively compete; its ability to expand its product offerings and distribution channels; its ability to cost-effectively attract new customers, retain existing customers and increase the number of customers it serves; its amount of indebtedness and ability to fulfill its debt-related obligations; its ability to comply with the covenants in its revolving credit facility; seasonal trends in customer behavior; its expectations regarding, and the stability of, its supply chain; the size and growth of the markets for its product offerings and its ability to serve those markets; federal and state legal and regulatory developments; other anticipated trends and challenges in its business; and other risks more fully described in the Company’s public reports filed with the U.S. Securities and Exchange Commission (the “SEC”), including under the caption “Risk Factors” in the Company’s Quarterly Reports on Form 10-Q for both the fiscal quarter ended June 30, 2018 filed with the SEC and the fiscal quarter ended September 30, 2018 to be filed with the SEC, and in other filings that Blue Apron may make with the SEC in the future. Blue Apron assumes no obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.
Media:
Nisha Devarajan
nisha.devarajan@blueapron.com
Investors:
Felise Glantz Kissell
felise.kissell@blueapron.com