We know that companies go out of business quite a lot but the fact that the current economic conditions are such that even good businesses are shutting down is a very sad state of affairs. One such company named Kaspien, previously known as Etailz, is shutting down due to soaring losses and not enough runway to extend its operations.
As reported by GeekWire, “Kaspien Holdings, a publicly traded company that helps online brands boost sales on Amazon and other e-commerce platforms, is closing up shop. The Spokane, Wash-based company said in a filing this week that it has initiated a plan to wind down operations and complete a shutdown by May 1 of next year, following an assessment of its cash and liquidity position and near-term debt maturities. Kaspien’s third-quarter earnings report shows revenue of $26.4 million for the 13 weeks ending Oct. 28, down 9.3% year-over-year, and a net loss of $1.8 million. The company reported a net loss of $5.1 million for the 39 weeks ending Oct. 28. It previously reported negative cash flows from operations in fiscal 2022 and 2021. As of Oct. 28, the company had $400,000 in cash and cash equivalents”.
Kaspien’s former CEO till 2022, Kunal Chopra, said that “Companies that do not innovate are bound to fail,”. “In a fast-paced, competitive world, getting outcompeted is just a matter of time.” and added that he was “sad” that his former company was going out of business. Hannah Sandmeyer, director of sales and business development, commented on Kunal’s post saying that they simply “ran out of runway” and added that “The business is a tough one, so many dark corners, margins so thin, and with such a big sail, it was hard one to pivot fast enough,”
It is also reported that “Kaspien’s stock surged at the beginning of 2021, reaching a peak of $46 per share. But it has gone downhill from there, trading at around $0.05/share on Tuesday. The company said, “it expects the delisting of its common stock from the OTCQB to be effective on or around Jan. 8”. It is clear why Kunal left the company last year and how difficult it would have been for the interim CEO to handle the situation.
