Blue Apron Gets a New CEO and a Much-Needed Strategy Shift
Blue Apron (NYSE: APRN), the struggling meal-kit delivery service, has a new CEO. Co-founder Matt Salzberg is stepping down from his role as CEO and President, replaced by CFO Brad Dickerson. Salzberg has been named Executive Chairman, and he will retain his position as chairman of the board of directors.
This management shuffle comes after a disastrous few months for Blue Apron. The company went public in June at $10 per share, well below its original $16 to $17 range. After two quarterly reports, it's clear that Blue Apron's growth story was a mirage. Heavy spending on marketing hasn't prevented an exodus of customers, and ongoing issues at a new distribution facility are adding to the company's woes. The stock now trades for around $3 per share.
Dickerson told Bloomberg in a phone interview that his focus will be on improving profitability and boosting margins. That would be a shift from the current strategy of hurling marketing dollars at new customers who ultimately drop the service after a few weeks. It's the right move, but the company needs to go one step further. Blue Apron needs to admit that what it sells is a luxury product, not a mainstream alternative to the grocery store.
Source: Fool.com
