Food52 Files for Bankruptcy Amid Financial Struggles
It seems like things have really taken a turn for the worse.
Food52 Inc., the popular food and home decor company based in Brooklyn, has filed for bankruptcy protection this week after laying off numerous employees earlier in the month.
This 16-year-old company lost its funding when its lender, AvidBank, pulled out on December 15, leaving Food52—owner of the Dansk tableware brand and Schoolhouse home decor—with no funds at all.
“Suddenly, the company faced a serious existential crisis,” stated a filing in Delaware Bankruptcy Court.
Food52 operates an online platform offering recipes, home improvement ideas, and high-end home goods but chose not to comment on the situation.
Founded by New York Times food writers Amanda Hesser and Merrill Stubbs, the company was reportedly looking for a buyer after AvidBank’s withdrawal, according to various legal documents.
AvidBank has not yet responded to requests for comments.
One potential buyer, America’s Test Kitchen from Boston, which airs cooking shows on public television, has emerged as a stalking horse bidder willing to purchase the once-prominent company for $6.5 million, as they announced on Tuesday.
This amount significantly contrasts with Food52’s $100 million valuation from 2019, when private equity firm Chernin Group invested over $83 million to acquire a majority stake, per insiders.
Food52 encountered difficulties after acquiring Dansk and Schoolhouse in Portland, Oregon, ultimately managing three distinct brands without much synergy. Additionally, the company is facing ongoing changes in leadership, strategy, and employee turnover.
Located in the Brooklyn Navy Yard, Food52 occupies the 13th floor, where it runs a test kitchen and studio, and it’s led by CEO Erika Badan, formerly of Barstool Sports.
Badan’s been steering the ship for nearly two years, and now finds herself overseeing the bankruptcy process.
“To be honest,” she noted in the filing, “This Chapter 11 case is hardly ideal, but it’s the only way to maximize and protect value.” She emphasized that despite Avid’s actions, the business remains viable.
The auction of the company’s assets is scheduled for February, and bidding on these assets might bring about improved offers.
America’s Test Kitchen’s proposal would allow Food52 immediate access to cash to support its operations during the sales transition.
The company, which currently relies on a small team of employees, has more than $1 million in assets but over $17 million in debt, according to court documents.
