Meal kit provider Blue Apron shares jumped Friday (June 9) on news of its shift to an asset-light model.
The shares jumped as much as 71% in early morning trading, Seeking Alpha reported Friday. Shares of the stock closed Friday night at $8.95, up 67.29% from the previous close.
The shares have made a small gain year-to-date, though they remain far below their 52-week high.
The report attributed Friday’s gains to the closing of Blue Apron’s previously announced transaction with FreshRealm, in which Blue Apron transferred its operational infrastructure to the provider of fresh meals to retailers, and its shift to an asset-light model.
When announcing the closing of the sale Friday, Blue Apron said in a press release that the transaction allows it to eliminate its debt, reduce costs, become more agile and accelerate its progress to profitability.
“Blue Apron is now an asset-light company, focused on the growth of its direct-to-consumer business,” the company said in the release. “The company plans to continue to build its strong brand and deliver the high-quality products its customers have come to love. In addition, Blue Apron expects to accelerate the expansion of its product offerings, including the addition of new convenient options.”
The firm has made some other adjustments as well.
In April, Blue Apron said it was turning its focus to its lower-effort Heat & Eat meals and to sales channels that enable consumers to make purchases without committing to a regular subscription plan.
As PYMNTS reported at the time, convenience and flexibility can help meal kit providers secure consumers’ loyalty amid inflationary pressures.
Blue Apron has also shifted its marketing spend from media buys intended to boost awareness to promotional efforts meant to address consumers’ initial anxieties about the price of meal kits, from which point the company can upsell those customers down the line.
“People are very price sensitive at the beginning of trying a meal kit, and then once they’re in, they are far less price sensitive,” Blue Apron CEO Linda Findley said on March 16 during an earnings call. “We have the ability to say, ‘Let’s target fewer customers with a better promotion, bring them in, and then the lifetime value gets higher.”