About a year ago, online retailer Packable was preparing to go public through a special-purpose acquisition company. Packable is laying off staff and preparing to liquidate as the SPAC market evaporates and the economy is in turmoil, according to internal documents seen by CNBC.
Packable is the parent company of Pharmapacks, an online distributor of health, personal care and beauty products. Pharmapacks was founded in 2010 as his single brick-and-mortar pharmacy in the Bronx, New York. Amazon.
Last September, Pharmapacks was the #1 Amazon seller in the US, according to a research firm, and now ranks #5 among the top sellers of sites nationwide. marketplace pulse.
In a notice to employees on Monday, Packable laid off 138 people, representing about 20% of its workforce, while the remaining 372 employees were laid off as “individual phase-down responsibilities have been completed.” said it plans to The memo was signed by her Leanna Bautista, the company’s Chief Human Resources Officer.
Packable failed to secure new funding that would allow it to continue operating, the notice said.
The company said it “intensively pursued internal and external financing options but ultimately failed.” “Given that the company does not have viable financing alternatives, we are currently seeking to cease operations, liquidate any remaining collateral, and close the business, including the facilities you report. I am forced.”
Previously secured packable funds from prominent investors, including: carlyle group, Fidelity, Lugard Road Capital. In addition to Amazon, we sell our products on marketplaces operated by the company. walmart, Ebay When Target.
As of 2020, Amazon is Packable’s largest channel, accounting for 80% of its sales, according to an investor presentation. Amazon’s third-party marketplaces now account for more than half of online retail sales and are at the core of Amazon’s primary e-commerce business. Because of Amazon’s global reach and large customer base, many retailers rely on Amazon for a large part, or even all, of their business.
The last year for Packable was a tumultuous one.rear publication In September, it planned to merge with SPAC (Highland Transcend Partners I Corp.), a deal that valued the company at $1.55 billion, the market began to change and investors expressed an appetite for SPAC. lost.
March, Packable canceled the transaction Days before Hyland Transcend’s shareholders’ meeting was scheduled, it proposed taking the company public, citing “unfavorable market conditions.” Packable CEO Andrew Vagenas quietly stepped down in his April and was succeeded by Daniel Myers. company websiteMyers, a former supply chain executive at Mondelez, said: named Last year on the Board of Directors of Packable. Vagenas continues to serve on the company’s board of directors. According to his LinkedIn.
Not a single SPAC was issued in July because what was left on the market was completely exhausted, according to the company. CNBC calculator of SPAC Research data. The 2020 and 2021 boom has created over 600 of his SPACs looking for targets.
For Packable, the loss of capital represents a dramatic shift in a booming business after the outbreak of the Covid-19 pandemic. With consumers stuck at home, online spending has surged and investors have flooded the sector.
Earnings slowed last year from double-digit growth in 2020 as the company struggled to cope with supply chain constraints, resulting in “massive out-of-stocks, delayed purchase orders,” according to an investor presentation. , and delays in onboarding new customers.”
However, the business was able to grow through the first half of 2022. Said Average daily revenue in January increased to an estimated $1.6 million from $1.5 million in Q4 2021.
A representative for Packable didn’t immediately respond to a request for comment.