In October 2022, Boxed expanded its rapid delivery service to more areas outside its New York City home of Manhattan.
Boxed Inc.’s board of directors, with the support of management and financial and legal advisors, has launched a process to explore strategic alternatives, including a possible sale of the commerce technology company.
The company, specializing as both an e-commerce retailer and e-commerce enabler, is also actively exploring capital-raising initiatives, and is targeting the announcement of additional funding within the next 45 days.
The possible sale may be surprising to some, as in its recent third quarter, Boxed managed to meet or exceed many expectations on multiple levels.For the quarter ended 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.
However, going back to the earnings report, the third quarter wasn’t without its hiccups. Boxed company’s net revenue was $41.7 million, a decrease of $7.4 million, or 15.0%, versus the prior-year period, primarily driven by a decline in software and services revenue.
The lower software revenue also contributed to a loss of $16.4 million for adjusted EBITDA, compared with a loss of $3.0 million in the prior-year period. Other contributing factors to this drop were higher growth-related and public company-related investments, including staff, professional services, insurance and IT costs.
Net loss for the company was $26.4 million for its third quarter, compared with a net loss of $5.9 million in the prior-year period.
Boxed stressed that there can be no assurance that any offers will be made or accepted, that any agreement will be executed, or that any transaction will be completed in connection with the strategic alternatives or capital-raising processes.
According to the company, it doesn’t intend to make further announcements about the strategic alternatives or capital-raising processes until the board has approved a specific transaction or determines that further disclosure is necessary.
The board has retained Cowen and Solomon Partners Securities LLC as its financial advisors and Freshfields Bruckhaus Deringer (US) LLP as its legal advisor to assist with the strategic-alternatives process.