Business In News
Boxed has filed for Chapter 11 bankruptcy protection and will wind down its retail operations while pursuing a sale of its software business. The ecommerce retailer will fund and protect its near-term operations and cover administrative expenses through access to its cash collateral.
Spresso, Boxed’s Software-as-a-Service platform, will be transitioned into a new, separate legal entity during this period and will continue as a going concern. Spresso customers are not expected to experience any disruption of service during the sale process, which will result in first lien lenders taking control of the platform.
Boxed attributed the filing to “the challenging business environment,” which led to the “difficult yet necessary decision to wind down its retail ecommerce operations” despite the company’s best efforts. Additionally, Boxed held a majority of its cash deposits and other liquid assets with the collapsed Silicon Valley Bank.
The ecommerce retailer first began exploring financial alternatives, including a sale, in January 2023. At the time, Boxed was reeling from a challenging Q3 2022 in which its net loss grew to $26.4 million, more than 4X the net loss of $5.9 million reported during the same period in 2021. Retail generated nearly all of its $41.7 million in net revenue while the software business generated approximately $100,000.
“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 in a statement. “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. 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 ecommerce consumables industry.”