About a year ago, online retailer Packable was preparing to go public through a special-purpose acquisition company. With the SPAC market evaporating and the economy currently in recession, Packable is laying off employees and preparing for liquidation, according to internal documents reviewed by CNBC.
Packable is the parent company of Pharmapacks, an online seller of health, personal care and beauty products. Pharmapacks was founded in 2010 as a single brick-and-mortar pharmacy in the Bronx, New York, before switching to the Internet and establishing a major home on the Internet. Amazon.
Last September, Pharmapacks was the #1 Amazon seller in the US, although it now ranks 5th among the top sellers nationally, according to the research firm. Marketplace Pulse.
Packable said in a notice to employees Monday that it has laid off 138 people, or about 20% of employees, with the remaining 372 employees expected to be laid off as “personal responsibility Accomplished.” The memorandum was signed by Leanna Bautista, the company’s chief human resources officer.
Packable failed to secure new financing that would keep it in business, the announcement said.
“We diligently pursued internal and external funding options but were ultimately unsuccessful,” the company said. “As the company does not have a viable financial alternative, we are now forced to cease operations, liquidate any remaining collateral, and close the business, including the one you report on. .”
Packable previously guaranteed capital from well-known investors, including Carlyle Group, Fidelity and Lugard Road Capital. In addition to Amazon, the company also sells products on markets run by Amazon Walmart, eBay and Target.
As of 2020, Amazon is Packable’s largest channel, accounting for 80% of sales, according to an investor presentation. Amazon’s third-party marketplace has become the heart of its dominant e-commerce business, as it now accounts for more than half of online retail sales. Because of Amazon’s global reach and huge customer base, many retailers trust the company for most and in some cases their entire business.
Packable’s last year was turbulent. After notification in September plans to merge with SPAC – Highland Transcend Partners I Corp. – in a deal that valued the company at $1.55 billion, the market started to turn around and investors were no longer interested in SPAC.
In March, can pack call for agreement to take the company public, citing “unfavorable market conditions,” just days before Highland Transcend shareholders are scheduled to meet. Packable CEO Andrew Vagenas quietly stepped down in April and was succeeded by Daniel Myers, according to The company’s web site. Myers, a former supply chain executive at Mondelez, has named on Packable’s board last year. Vagenas still sits on the company’s board of directors, follow his LinkedIn.
Not a single SPAC was issued in July because what was left on the market was completely exhausted, CNBC calculates SPAC research data. The boom in 2020 and 2021 has spawned more than 600 target-hunting SPACs.
For Packable, the capital’s disappearance represents a major turning point for a business that thrived in the wake of the Covid-19 pandemic. With consumers stuck at home, online spending surged and investors poured into the sector.
Last year’s revenue slowed from double-digit growth in 2020 as the company struggled to adjust to supply chain constraints, which “resulted in significant inventories, orders delays and delays in reaching new customers,” according to an investor presentation.
However, the business can still grow through early 2022. In February, Packable speak Its average daily revenue for January rose to an estimated $1.6 million from $1.5 million in Q4 2021.
Representatives from Packable did not immediately respond to a request for comment.
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