Boxed Files for Bankruptcy, Will Cease Retail Operations
Following the exploration of strategic alternatives and capital-raising initiatives earlier this year, Boxed Inc. has filed for Chapter 11 bankruptcy. The commerce technology company, which was founded in 2013, will sell its Spresso software business as it works to wind down its remaining retail business.
The company’s board of directors unanimously decided that seeking Chapter 11 protection is the most appropriate path forward for Boxed, according to a press release. Spresso is being sold to the company’s first lien secured lenders, and Boxed will officially cease its e-commerce retail operations over the next several weeks.
“This was an incredibly difficult decision, and one that we reached only after carefully evaluating and exhausting all available options,” said Chieh Huang, co-founder and CEO of Boxed. “Although this outcome is not what we worked so hard for, we are thankful to everyone, including our customers, who have supported us along the way.”
Continued Huang: “Looking to the future, we are incredibly excited to watch the Spresso business continue under new ownership. I am immensely grateful for each and every team member throughout the past decade who has contributed to the journey of Boxed. Through their hard work and dedication, they made a lasting impact on the e-commerce consumables industry.”
In its bankruptcy filings, Boxed listed $102.6 million in assets and $190.4 million in liabilities.
Boxed did manage to meet or exceed many expectations on multiple levels during its most recent third quarter, ending Sept. 30, 2022. The company reported retail net revenue of $41.6 million, an increase of $3.4 million, or 8.9%, versus the prior-year period. This was supported by a spike in order frequency and a higher mix of B2B customer orders, both leading to a strong increase in retail net revenue per active customer.
The company’s earnings report also indicated its retail segment gross profit was $4.9 million, an increase of $2.3 million, or 88.8%, with gross margins improving to 11.9%, an increase of 503 basis points, compared with the prior-year period. This was also supported by momentum in B2B as well as Boxed Market, transportation cost savings, packaging cost savings, and ongoing price optimization leveraging Spresso technology.
In October 2022, Boxed even expanded its rapid delivery service to more areas outside its New York City home of Manhattan. The company opened a new fulfillment center in Elmsford, N.Y., and one in the New York borough of Brooklyn on Nov. 1.
