Blue Apron, a leader in the meal kit services industry, recently announced that its founder Matt Salzberg will be stepping down as CEO, and CFO Brad Dickerson will take his place at the helm. The company is searching for a new CFO to replace Dickerson.
Blue Apron has had a tumultuous year. The company has had tremendous growth in the five short years it’s been in business, bringing in almost 211 million dollars in the last reported quarter. Despite its growth and revenue, industry changes have derailed its success.
Before launching its IPO this past June, Amazon announced its acquisition of popular grocery chain Whole Foods, and began offering its own meal kits for a lower price. Amazon’s distribution network coupled with its new acquisition disrupted the meal kit services industry and worried potential investors, impacting Blue Apron’s IPO. Blue Apron was originally going to offer its stock for between $15-$17 per share, but dropped it down to $10 in light of investor concerns.
As of November 30, shares were trading at only $2.99.
Amazon hasn’t been the only concern among investors. Blue Apron has allocated a lot of its resources to marketing, though customer retention has fallen. The company also invested in a new distribution center, which has been costly. In October, the company announced it was laying off hundreds of workers, or about 5% of its workforce, in a "company-wide realignment."
Hello Fresh, another industry leader, went public recently as well on the Frankfurt Stock Exchange, but had a much more positive response than Blue Apron’s IPO. Shares of Hello Fresh have traded around $12. The company also has higher revenue and lower net losses than Blue Apron, making it a more attractive investment.
Blue Apron has some ground to cover to make its company more attractive to potential investors and better position itself in the increasingly competitive market.
"It has been a tremendous honor to serve as the CEO of Blue Apron since founding the company and I am incredibly proud of everything our team has accomplished together in just five years," said Salzberg in a statement.
Before joining Blue Apron, Dickerson, 52, spent eleven years at Under Armour in senior leadership roles including as Chief Financial Officer and Chief Operating Officer. As one of Under Armour’s most tenured executives, Dickerson helped advance the company’s growth strategy, taking Under Armour from $200 million to $4 billion in net revenue.
According to NBC News, Blue Apron was once valued at $2.2 billion by private market investors, now has a market capitalization of $568 million.