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Amazon seller Packable lays off employees, begins liquidating

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A couple of 12 months ago, online retailer Packable was preparing to go public through a special purpose acquisition company. With the SPAC market having evaporated and the economy now sputtering, Packable is shedding staff and preparing to liquidate, in line with internal documents reviewed by CNBC.

Packable is the parent company of Pharmapacks, an internet seller of health, personal care and sweetness products. Pharmapacks was founded in 2010 as a single brick-and-mortar pharmacy within the Bronx, Recent York, before it turned to the web and established an enormous home on Amazon.

Last September, Pharmapacks was the No. 1 Amazon seller within the U.S., though it now ranks fifth amongst the positioning’s top sellers nationwide, in line with research firm Marketplace Pulse.

Packable said in a notice to employees Monday that it was shedding 138 people, or roughly 20% of its staff, with the remaining 372 employees expected to be terminated as “individual winddown responsibilities are accomplished.” The memo was signed by Leanna Bautista, the corporate’s chief people officer.

Packable did not secure latest financing that might have enabled it to remain in business, the notice said.

“We diligently pursued internal and external financing options but were ultimately unsuccessful,” the corporate said. “Given the corporate has no viable financing alternatives, we at the moment are forced to stop operations, liquidate any remaining collateral, and shut down the business, including the power you report back to.”

Packable previously secured funding from high-profile investors, including Carlyle Group, Fidelity and Lugard Road Capital. Along with Amazon, the corporate sells products on marketplaces run by Walmart, eBay and Goal.

As of 2020, Amazon was by far Packable’s largest channel, accounting for 80% of sales, in line with an investor presentation. Amazon’s third-party marketplace has develop into the centerpiece of its dominant e-commerce business, because it now accounts for greater than half of online retail sales. Due to Amazon’s global reach and big customer base, many retailers count on the corporate for almost all, and in some cases the whole thing, of their business.

Packable’s last 12 months has been fraught with turbulence. After announcing in September plans to merge with a SPAC — Highland Transcend Partners I Corp. — in a deal that valued the corporate at $1.55 billion, the market began to turn and investors lost their appetite for SPACs.

In March, Packable called off the deal to take the corporate public, citing “unfavorable market conditions,” just days before Highland Transcend’s shareholders were scheduled to fulfill. Packable CEO Andrew Vagenas quietly resigned in April, and was succeeded by Daniel Myers, in line with the corporate’s website. Myers, a former supply chain executive at Mondelez, was named to Packable’s board last 12 months. Vagenas still sits on the corporate’s board, in line with his LinkedIn.

Not a single SPAC was issued in July as what remained of the market dried up completely, in line with CNBC calculations of SPAC Research data. A boom in 2020 and 2021 created greater than 600 SPACs trying to find targets.

For Packable, the disappearance of capital represented a dramatic turn for a business that boomed after the onset of the Covid-19 pandemic. With consumers stuck at home, online spending surged, and investors poured into the space.

Revenue slowed last 12 months from double-digit growth in 2020 as the corporate struggled to navigate supply-chain constraints, which “resulted in significant inventory out of stock, purchase order delays, and delays in onboarding latest customers,” in line with an investor presentation.

Nevertheless, the business was still capable of grow some through the early a part of 2022. In February, Packable said its average each day revenue in January increased to an estimated $1.6 million from $1.5 million within the fourth quarter of 2021.

Representatives from Packable didn’t immediately reply to a request for comment.

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