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.
Earlier this month the company said it planned to lay off its workforce with the exception of a “core group of employees” by the end of January. Kaspien has less than 100 employees, according to LinkedIn.
Kaspien’s third quarter earnings report shows revenue of $26.4 million for the 13-week period 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-week period 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.
A number of other agencies that work with Amazon sellers have also faced recent struggles, including Benitago and Thrasio.
Kaspien is led by CEO Brock Kowalchuk, who joined the company in 2018 after a 7-year stint with Goldman Sachs. He was previously CFO and became interim CEO in March 2022.
The company traces its roots to a largely bootstrapped Spokane startup called Etailz that was acquired by Trans World Entertainment in 2016 for $75 million in cash and stock.
Etailz rebranded to Kaspien in 2020, and Trans World also changed its name to Kaspien Holdings at the time. Trans World originally launched in 1972.
Kunal Chopra, who led the company as CEO from 2019 to 2022, said on LinkedIn that he was “sad” to see Kaspien going out of business.
“Companies that do not innovate are bound to fail,” he wrote in the post. “In a fast-paced, competitive world, getting outcompeted is just a matter of time.”
Hannah Sandmeyer, director of sales and business development, commented on Chopra’s post, saying that the company “simply ran out of runway” and “now so many have lost their jobs right before the holidays and are scared.”
“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,” Sandmeyer wrote.
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.
Kaspien’s board of directors include W. Michael Reickert, managing member of Independent Family Office LLC; Jonathan Marcus, CEO of Alimco Re Ltd; Tom Simpson, an angel investor who helped start Etailz with Josh and Sarah Neblett in 2008; and Mark Holliday, president of Goshawk Capital Corp.
We reached out to the company for comment and we’ll update this story if we hear back.
