Retail technology influencer Brittain Ladd weighs in on Takeoff Technologies Chapter 11 bankruptcy filing

Takeoff Technologies, a provider of e-grocery fulfilment solutions, filed for Chapter 11 on Thursday of last week with a plan to seek buyers for some or all of its assets.

“We are taking this necessary next step after careful consideration and in consultation with management, advisors, and the board. The interest demonstrated by our customers in continuing to do business with us demonstrates the strong need for Takeoff’s products and services in the marketplace,” said John DiDonato, Managing Director at Huron Consulting Group and Chief Restructuring Officer at Takeoff, which was founded in 2016.

“Through this process, our priority is minimising disruption for our valued customers and employees, and the communities they serve, as we continue to engage in discussions with potential buyers to maximise value for our stakeholders.”

“The e-grocery fulfilment solution is an essential service in the food retail industry and our customers are reliant upon our lower-cost-to-serve technology. We extend our deepest gratitude to our employees, customers, partners, and the communities we serve.”

Brittain Ladd, a supply chain consultant and former Amazon executive, has weighed in on the Chapter 11 bankruptcy filing after breaking the story a few weeks ago.

In a LinkedIn post, he said: “The brutal truth of the matter is that Takeoff was a poorly run company that lacked a coherent strategy. For example, its must sell and install at least three MFCs at a customer to be contribution margin positive. It struggled to convince customers to move beyond a pilot.”

“Why? Because most customers didn’t see any value in installing more MFCs. When Takeoff did sell multiple systems, it failed to scale the operations efficiently resulting in higher costs and little to no profit.”

To make matters worse, Takeoff made a poor decision regarding its software, especially as it relates to being able to pick multiple orders at the same time, Ladd added.

“IT personnel in India and the U. stated to me many times that, the software still needs to be improved.”

“Takeoff had to file bankruptcy because it couldn’t find a buyer for the company in 2023. Its revenue has declined over the past two years, generating $40.6 million in gross revenue in 2022 and cratering to $27.26 million in 2023, while reporting operating losses of $57.8 million in 2022 that grew to a $63 million operating loss in 2023.”

“Takeoff is only able to keep operating due to $9.6 million in debtor-in-possession financing from a consortium of its customers, including Woolworths Group, Albertson's Cos., Village Super Market, ShopRite, and Inserra Supermarkets.”

“Any consortium member can acquire all or only some of Takeoff’s assets. If Takeoff can’t find a buyer for any of its assets, it’ll wind down its operations.”

Ladd is strongly advising Albertsons to end its relationship with Takeoff asap.

If Albertsons merges with Kroger, Ocado Group will play a large role in the combined companies, he observed.

If the merger doesn’t happen, Albertsons needs to elevate its MFC capabilities by partnering with Attabotics and AutoStore.   

He argued: “Note to Hy-Vee. Like Albertsons, you need to pivot and make a change. The Woolworths Group is under extreme pressure to reduce prices, reduce costs and improve customer experience. CEO Brad Banducci and soon to be CEO Amanda Bardwell, would be wise to rethink their MFC strategy altogether.”

“Acquiring Takeoff is not in the best interests of Woolworths, in my opinion. There are much better options for Woolworths to consider. C&S Wholesale Grocers should assess acquiring Takeoff. C&S may purchase up to 700 stores from Albertsons and Kroger as part of their pending merger agreement.”

“Leveraging Takeoff’s platform and MFCs throughput the network of stores acquired by C&S would be a wise move if the merger is approved.”

He concluded: “Uber, DoorDash, Instacart, Dot Foods, UNFI, and Target should be contacted by Takeoff. I wish Takeoff the best.”

Takeoff did not respond to our request for comment.