Blue Apron Holdings will live to see another day, but not as an independent business. Marc Lore’s Wonder Group has closed its $103 million acquisition of the pioneering meal kit delivery company.
All 165 Blue Apron employees have joined Wonder Group, which has bought the Blue Apron brand and marketing. The company will operate as a subsidiary of Wonder Group, according to Linda Findley, president and CEO, who has also joined Wonder. In September, Wonder, the food and restaurant company founded by Lore, agreed to buy Blue Apron for $13 a share.
“We still own everything around the brand aspect and the marketing aspect of the product and will continue to produce the product as it was produced before,” Findley told Fortune.
Starting on Monday, Nov. 13, consumers can still order their meal kits through the Blue Apron website or app. Residents of New York City and New Jersey can also order the kits through the Wonder app and get it delivered if they live within the Wonder delivery zones. For everyone else, the kits will be shipped, a spokesman said. Blue Apron's "heat & eat” microwavable meals, like lemon chicken, egg noodles & beef meatballs, or cheesy Mexican chicken & rice, will also be available. These items can be delivered if the customer lives in the Wonder delivery zones, the spokesman said. As Wonder expands its locations, so will its delivery services, they said.
“As we continue to revolutionize the food industry through our creation of Fast Fine dining, we’re excited to continue expanding on the ways we can offer unique and elevated dining experiences through more choice, flexibility, and convenience,” said Lore, Wonder Group’s founder and CEO, in a statement.
The Blue Apron sale to Wonder is a reprieve for the company that was once one of the biggest providers of meal kits. In August, Blue Apron said it cut 20% of its workforce, just months after laying off 10% of corporate payroll in December. Last week, Blue Apron warned that it had “substantial doubt” it could continue as a going concern if it couldn’t consummate the merger with Wonder, according to a Nov. 9 SEC filing. It also cited a history of significant net losses. Blue Apron reported that third quarter losses narrowed to about $10.3 million for the three months ended Sept. 30 compared to about $26 million for the same time period in 2022. Blue Apron has posted the disclosure about its financial condition in its filings for several quarters, a spokesman said. With the sale, Blue Apron was recapitalized as a Wonder subsidiary, making the warning irrelevant, the spokesman said. Blue Apron is also debt free after selling its operational infrastructure, including fulfillment centers and equipment, to FreshRealm for $50 million in June. (FreshRealm will continue to make and produce the Blue Apron meal kits, Findley said.)
Wonder Group is the latest business from Lore, a serial entrepreneur who cofounded The Pit, an online auction marketplace for sports trading cards and memorabilia, that was sold to Topps in 2001. He also started Quidsi, parent of Diapers.com, Soap.com and Wag.com, that was acquired by Amazon for $545 million in 2011. Walmart acquired Jet.com, another Lore company, in 2016 for $3.3 billion.
Wonder has developed a new kind of food hall, a kitchen at each location that is able to reproduce the meals of more than 20 restaurants. Customers can order from one, or many restaurants, at the Wonder location or through the app. They also have choices on how they get their food. They can pick it up at the Wonder location, have it delivered or eat in at the restaurant. Wonder has five locations spread through New York City and New Jersey with plans to add another five by the end of the year, a spokesman said. It currently employs 1100 people, but Lore expects that will grow to 1400 by the end of this year. Wonder, which emerged from stealth in 2021, has so far raised $800 million, Lore said. Last week, Nestle invested $100 million in the company, CNBC reported. "It's a very small stake," Lore said.
Luisa Beltran
Email: luisa.beltran@fortune.com
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