Online bulk retailer Boxed to wind down retail ops
Boxed has filed for Chapter 11 bankruptcy protection.
The online retailer, which sells bulk sizes of pantry items and other everyday essentials to consumers and businesses without the requirement of a membership fee, said it plans to sell its Spresso software business to its first lien lenders and continue to streamline operations, including a wind-down of its remaining retail business during the next several weeks. (Spresso is Boxed’s own software & service business, which it sells to other retailers.)
Boxed was founded in 2013, positioning itself as an online competitor to membership warehouse clubs. It went public in 2021 via a deal with special purpose acquisition company Seven Oaks Acquisition Corp. The deal valued Boxed at approximately $900 million.
In a filing with the Securities and Exchange Commission last month, Boxed, which also runs a grocery delivery business in New York City, said it was considering bankruptcy protection while also “soliciting proposals for the sale of all or substantially all of its assets.” The filing came days after the collapse of the Silicon Valley Bank, which “held the majority of its cash deposits and other liquid instruments,” Boxed noted in the filing.
In its court petition for bankruptcy, Boxed listed total assets of $102.6 million and total debts of $190.4 million.
"This was an incredibly difficult decision, and one that we reached only after carefully evaluating and exhausting all available options," stated CEO and co-founder Chieh Huang. “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. Looking to the future, we are incredibly excited to watch the Spresso business continue under new ownership.”
Boxed intends to fund and protect its near-term operations and cover administrative expenses through access to its cash collateral as the company winds down during the Chapter 11 process and transitions its Spresso business to a new separate legal entity that will continue as a going concern.
The Spresso business customers are not anticipated to see any disruption of service throughout the sale process, Boxed said.