BE AWARE OF THE RIPPLE EFFECT

Part of being vigilant and protecting your own job is to be aware of your environment. The closure of a single large plant can have a ripple effect in the community as people are laid off and either reduce their spending for non-essentials or simply move away to pursue opportunities in other communities.

The hardest hits are the direct subcontractors and vendors to the closed plant whose loss of business or inability to collect on their overdue accounts might result in layoffs of their own.

The next hardest hits are the restaurants, convenience stores, and personal service vendors located in proximity to the stricken plant or on the main roads leading into the plant. Furniture and electronics stores are also impacted. Large box discount retailers often see a drop in total business that is sometimes offset by new customers trading brand-name shopping and convenience for lower prices. 

Be continually aware of what is happening in your state, industry, company, and community and their potential impacts they may have on your employment.

NO LOVE AT BLUE APRON (12/08/22)

DECEMBER 8, 2022 — 10% REDUCTION IN FORCE

The company has announced its intention to reduce its workforce by 10% to stay afloat during a period of stagnant sales. Approximately 170 employees are at risk.

The company’s shares have declined 93% over the past year, from $11.40 to $0.79, making them subject to delisting.

According to a company statement…

Expense Management

Blue Apron continues to identify and execute against multiple initiatives to both reduce expenses, and streamline decision-making and organizational structure, including a plan for meaningful reduction in marketing, consulting and labor spend in 2023.

As such, to create a more nimble, focused organization and to better align internal resources with strategic priorities, Blue Apron is streamlining its personnel this week. This will result in a reduction of approximately 10% of its total corporate workforce. As a result of these actions, the company expects to incur approximately $1.2 million in employee-related expenses, primarily consisting of severance payments, substantially all of which will result in cash expenditures. The company expects to recognize such expenses in the fourth quarter of 2022.

Blue Apron plans to further reduce expenses and has identified expense reductions of up to approximately $50.0 million in 2023, as compared to 2022, including the headcount changes identified above. These savings are planned to be implemented throughout the coming year.

APRIL 2, 2019 — BLUE APRON CHANGES CEOs AND MARKET APPROVES.

The company has announced that CEO Brad Dickerson has been replaced by the former COO at Etsy, Linda Findley Kozlowski. The announcement was greeted by a 15% bump in the stock price.

This could signal a dangerous time for some employees as new CEOs normally attempt some restructuring and a reduction in force to cut operating costs.

OCTOBER 23, 2017 — Original post…

Blue Apron, the purveyor of meal-kits, recipes and ingredients, has announced that it will be laying off approximately 300 employees. In spite of the management happy-talk about a “company-wide realignment” and “streamlining decision making for greater accountability,” the move looks like a cost-cutting move to retain interest in its underperforming stock. With Amazon’s acquisition of Whole Foods, Blue Apron can be facing its most formidable competition ever.  

Something-in-a-box appears to be a valid business model for those who like convenience, surprises, and have trouble making decisions, but Blue Apron reminds me of the dot-com boom when almost any concept associated with the internet could be used to raise investment capital with the goal of making the investors rich in a public offering. Even burdened with continuing multi-million dollar losses did not appear to matter only the story counted, and the company’s real customers were the speculative investors that could boost stock prices until management and employees were able to “call in rich.”

Outside of middle-class yuppies and pseudo-elites, I wonder how many people really comprise a marketplace for what amounts to mail-order meal kits? And, if this enthusiasm can be sustained over long periods of time.

While the “something-in-a-box” is a valid business model for those who like convenience, surprises, and may have trouble making decisions, the market for meal kits appears to be limited, both by the concept and the potential competition as there is nothing really proprietary that is protectable other than the codebase used for the platform. 

"In the second quarter, we saw an 18 percent year-over-year increase in net revenue, and a $20.6 million improvement in our net loss between the first and second quarters. We recently strengthened our balance sheet as a result of our initial public offering, convertible note issuance and the expansion of our revolving credit facility," said Matt Salzberg, chief executive officer of Blue Apron. “We are beginning a new chapter as a public company, and remain focused on our long-term strategy to build an iconic consumer brand, develop a more diverse product portfolio, and further build out an end-to-end supply chain platform.”

Red flags are flying at Blue Apron. But, you have to love their way with words in announcing their Second Quarter 2017 Financial Results.

“The second quarter net loss of $(31.6) million was an improvement of $20.6 million compared to the net loss in the first quarter of 2017 of $(52.2) million, reflecting the planned reduction in marketing spend.”

“The year-over-year growth rate in the second quarter of 2017 was lower than the year-over-year growth rate of 42% from the first quarter of 2017, driven by a planned reduction in marketing spend of $26.1 million between the first and second quarter.”

Let’s see if I have this right: Blue Apron planned to reduce their marketing spend by $26.1 million and then congratulates themselves because their second quarter 2017 net loss of $31.6 million is certainly better than their $52.2 million loss in the first quarter of 2017. So by not spending $26.1 million dollars, they reduced their loss by $20.6 million and call it a win?

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

NO LOVE AT SEARS OF CANADA

In what may be a precursor to the future of Sears here in the United States, Sears of Canada is seeking the approval of the Canadian bankruptcy court to close approximately 130 remaining stores and permanently laying off 12,000 employees.

Founded as Simpsons-Sears in 1952 as a partnership between Toronto’s Robert Simpson Company of Toronto and Sears Roebuck Co. of Chicago, the company appears to have failed to adapt to changing times and increased pressure from other more nimble retailers such as Amazon, Walmart, and BestBuy.

Like everything associated with the billionaire hedge fund operator and bully-boy Eddie Lampert and ESL Investments, it appears that the company may have been positioned and operated for the benefit of its major stockholder who would rather transfer real estate and dividends to his benefit rather than invest in long-term growth. This idea appears to be reinforced by Sears Canada’s Executive Chairman Brandon Stranzl, who previously worked as an investment analyst at ESL.

This appears to be a failure of leadership, leadership who raised hundreds of millions of dollars in potential capital investment by selling off its choice real estate holdings and leases to landlords – and then declaring hundreds of millions in special dividends to its shareholders. A move that benefited Lampert and ESL and mirrored Lampert’s actions in the United States.

Present day employees are not the only ones impacted as it appears that the retailer might use another Wall Street trick, purchasing an annuity to satisfy the company’s pension obligations to approximately 18,000 retirees and beneficiaries.

With retail cratering, especially against the onrushing onslaught of Amazon, Walmart, and Costco, it is important for employees to keep their eyes wide open to fast-developing conditions on the ground.