Bankrupt online bulk-products retailer Boxed.com is getting a second life.
MSG Distributors, a Farmingdale, New York-based regional distributor of consumables and household items, said Friday that it has acquired Boxed’s intellectual property and affiliates and plans to relaunch the e-tail brand in the business-to-consumer (B2C) and business-to-business (B2B) markets. Financial terms of the deal weren’t disclosed.
In early April, New York-based Boxed announced plans to sell its Spresso technology unit and wind down its retail business under a Chapter 11 bankruptcy protection filing, with the Spresso business being transitioned to a new, separate legal entity and continuing as a going concern. The retailer’s stock was delisted from the New York Stock Exchange shortly thereafter.
Then at the end of May, Hilco Streambank, an intellectual property disposition and valuation firm, announced that it would auction off Boxed’s assets this summer. Assets available for the auction, held in July, included Boxed’s domain name, customer data and trademarks—as well as the Prince & Spring private brand—plus social media accounts and related items. Hilco noted that the asset sale would be conducted under the e-tailer’s Chapter 11 proceedings and require bankruptcy court approval.
MSG said that, under its ownership, the Boxed customer base will benefit from “expeditious delivery services,” including next-day delivery, for the current brands they purchase as well as get access to a “catalog of new items and brands that meet as many of their grocery and home good needs as possible.” In rekindling Boxed, MSG noted that it will bring back established household brands and expand offerings with new and up-and-coming brands.
“This acquisition strengthens our inorganic growth strategy and diversifies our distribution models nationwide,” MSG Distributors President Mark Gadayev said in a statement. “The loyalty and trust that customers and brands have in Boxed is priceless, and we are committed to continue this model of offering bulk-sized products to customers at wholesale prices.”
Customers being primed for relaunch
Boxed currently isn’t operations, but the Boxed.com homepage shows the message, “Be right back. See you again soon,” and includes links to an FAQ and a mailing list.
“Boxed is under new ownership and will be relaunched soon. We can’t wait for you to experience the new Boxed and to welcome you back. Please join our mailing list to be the first to know,” the FAQ answered for the “Is Boxed back?” question. “In early 2023, Boxed filed for bankruptcy and has since been in the process of winding down operations. However, Boxed is now under new ownership and is working on relaunching an elevated online experience soon,” the FAQ explained, adding, “You’ll find many of your favorite products on the new Boxed website as it launches. And we will be adding more of the brands you expect from Boxed every day. Subscribe to our mailing list to be the first to hear about new products.”
On its website, MSG said it now offers more than 1,325 products and 47 brands in 1.1 million square feet of warehouse space. The company specializes in distribution of natural foods and sports nutrition products to natural and health food stores, gyms, sports centers, pharmacies and other sellers, with direct-store delivery in all five New York City boroughs as well as in metropolitan New York’s Long Island market.
“In synergy with this acquisition, MSG will further enhance its capacity for processing and distribution to Boxed customers nationwide,” according to Gadayev. “In conjunction with our growing operations and patented innovations for distribution and warehouse management, the future of Boxed.com is bright, and the team at MSG is committed to ensuring that Boxed.com remains the go-to destination for customers seeking quality brands and exceptional customer service.”
Boxed brand held strong appeal
Led by co-founder and CEO Chieh Huang, Boxed struggled to maintain financing and cited a “challenging business environment” in making the “difficult-yet-necessary decision to wind down its retail e-commerce operations.” In mid-March, Boxed—impacted in part by the Silicon Valley Bank failure—disclosed it was weighing a potential bankruptcy filing.
For investors, Boxed offered a robust B2C and B2B retail business and an end-to-end e-commerce platform through a software-as-a-service model.
Founded in 2013, the company provided warehouse club-style shopping—including groceries, pantry items, household staples, health and beauty aids, office supplies, private label, and organic and green products—through its website and mobile app. Consumers and businesses were able to buy club-sized packages with free two-day delivery in the continental U.S. on purchases of over $49 (or $79, depending on location)—and without the membership fees of traditional warehouse clubs. Members of the BoxedUp loyalty program received free shipping for a $19.98 order minimum.
Boxed also offered Boxed Express, an on-demand delivery service for perishables, and in late 2021 entered the rapid grocery delivery arena via its first acquisition: New York City e-grocer MaxDelivery. That service was rebranded as Boxed Market in the 2022 second quarter, when the software and services business also was renamed as Spresso.
Boxed’s technology and operation were held in high regard. Described as the “Costco for Millennials,” the e-tailer reportedly had rejected acquisition bids from The Kroger Co. and drawn interest from companies such as Amazon and Bed Bath & Beyond. Lidl US also had partnered with Boxed.com to pilot a home delivery service using the online retailer’s technology.
New York-based Hilco noted Boxed’s strong appeal when announcing the asset auction.
“Boxed resonates with both B2B and B2C customers, offering them the convenience of bulk household essentials delivered to their door, without a membership fee,” Richelle Kalnit, senior vice president at Hilco Streambank, stated at the time. “This offering resonated so deeply with the customer that the brand recently expanded to offer a B2C premium subscription loyalty program, BoxedUp, garnering approximately 32,000 members and generating $21 million in GMV [gross merchandise value] in 2022. Coupled with its one-hour delivery service, Boxed Market, the company’s intangible assets position a buyer favorably for growth.”