Amazon seller Packable lays off employees, begins liquidation

About a year ago, online retailer Packable was preparing to go public through a special purpose acquisition company. With the SPAC market evaporating and the economy now bleak, Packable is preparing to lay off employees and liquidate, according to internal documents reviewed by CNBC.

Packable is the parent company of PharmPax, an online seller of health, personal care and beauty products. Pharmpax was founded in 2010 as a single brick-and-mortar pharmacy in the Bronx, New York, before it turned to the Internet and established a larger home on Amazon.

Last September, FarmPax was the No. 1 Amazon seller in the U.S., though it now ranks fifth among the site’s top sellers nationwide, according to research firm MarketplacePulse.

Packable said in a notice to employees Monday that it is laying off 138 people, or about 20% of its workforce, with the remaining 372 employees expected to be terminated as “personal winddown responsibilities are completed.” The memo was signed by Liana Bautista, the company’s chief public officer.

Packable failed to secure new financing that would enable it to remain in business, the notice said.

“We diligently pursued internal and external financing options but were ultimately unsuccessful,” the company said. “Because the company has no viable financing options, we are now forced to cease operations, liquidate any remaining collateral, and close the business with the facility you report.”

Packaged previously secured funds from high-profile investors including Carlyle Group, Fidelity and Lugard Road Capital. Besides Amazon, the company sells products on marketplaces operated by Walmart, eBay and Target.

As of 2020, Amazon was Packable’s largest channel, accounting for 80% of sales, according to an investor presentation. Amazon’s third-party marketplace has become the centerpiece of its flagship e-commerce business, as it now accounts for more than half of online retail sales. Because of Amazon’s global reach and large customer base, many retailers rely on the company for the majority, and in some cases the entirety, of their business.

Packable’s last year has been full of turmoil. After announcing in September that the SPAC – Highland Transcend Partners I Corp. – Planned to merge in a deal valuing the company at $1.55 billion, markets began to change and investors lost their appetite for SPACs.

In March, Packable canceled a deal to take the company public, citing “unfavorable market conditions,” just days before Highland Transcend was scheduled to meet shareholders. Packable CEO Andrew Vegenas quietly resigned in April, and was succeeded by Daniel Myers, according to the company’s website. Myers, a former supply chain executive at Mondelez, was named to Packable’s board last year. Vagenas still sits on the company’s board, according to his LinkedIn.

According to a CNBC count of SPAC research data, not one SPAC was issued in July because the rest of the market completely dried up. The boom in 2020 and 2021 created more than 600 SPACs for Targets.

For Packable, the loss of capital represented a dramatic turning point for a business that had thrived since the start of the Covid-19 pandemic. As consumers stuck at home, online spending soared, and investors poured into the space.

Revenue slowed from double-digit growth in 2020 last year as the company struggled to navigate supply-chain disruptions, which resulted in “significant out-of-stock inventory, purchase order delays, and delays in onboarding new customers,” according to an investor presentation.

However, trade was still able to grow somewhat in the early part of 2022. In February, Packable said its average daily revenue rose to an estimated $1.6 million in the fourth quarter of 2021 from $1.5 million in January.

Packable’s representatives did not immediately respond to a request for comment.

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