Boxed, which sells bulk pantry items to businesses and households, on Sunday said it has filed for bankruptcy and will wind down its retail e-commerce operations in the next few weeks. The company combined with a blank-check firm to go public in December 2021, near the tail end of the craze for SPAC deals. It had previously warned investors it was considering bankruptcy. The New York-based company said it would turn its software business Spresso into a separate legal entity, and sell it to senior creditors.
I have a unique history with Boxed. In 2017 and 2018, I worked for Kroger as a consultant. Among my many tasks at Kroger, was making recommendations for acquisitions and mergers. Below is a list of the recommendations I provided to Kroger:
1. Acquire Ocado Group or invest in Ocado and sign an agreement for Ocado to build and open automated CFCs. Kroger chose to invest in Ocado and contract the company to open as many as 20 CFCs. Note: I believe Ocado is a takeover target. I encourage Kroger to reassess acquiring Ocado. In my opinion, Instacart may acquire AutoStore™ or Ocado.
2. Merge with Target. Discussions were held but a merger did not occur.
3. Acquire Overstock, and move all e-commerce operations to Overstock’s headquarters in Midvale, UT. Kroger chose not to pursue this option.
4. Acquire Shipt. I got an agreement from Kroger to pursue the acquisition, but Kroger didn’t move as fast as I wanted. Target acquired Shipt one week prior to Kroger’s plan to engage in discussions with Target.
5. Acquire Boxed. Kroger made an offer in the $400M range for Boxed. Boxed rejected the offer. This will go down as one of the worst decisions in business. I wished the team from Boxed the best and I encouraged them to find another buyer. However, I knew Boxed had made a catastrophic mistake.
Why did Boxed file for bankruptcy, and why is the company going out of business? Because the executive team at Boxed FOOLISHLY believed that they could grow the company better on their own vs. being owned by the largest and most experienced grocery retailer in the United States.
I’ve stated many times on LinkedIn that founders often prove to be woeful CEOs. There have also been founders who turned out to be excellent CEOs, but they are the exception and not the rule.
Had Boxed been acquired by Kroger, the company would be thriving today as part of Kroger’s exceptional company and ecosystem. Boxed will make an excellent case study one day for students to analyze why the company made the decisions that they did.
I do wish the founders well. However, I will always wonder what might have been had Boxed accepted Kroger’s offer.
What killed Boxed? That’s easy. Boxed killed themselves.
