A massive company is now cutting 700 jobs in Georgia at one of its major facilities near Atlanta due to a drop in customer demand.
HelloFresh plans to shut down its distribution center in Newnan, Georgia, on July 10 as the German meal kit company grapples with reduced demand for its products, a spokesperson for the company confirmed on Thursday.
The closure of the plant will unfortunately cost a total of 727 employees their jobs.
“HelloFresh has seen its fortunes decline as the strong demand it experienced during the COVID-19 pandemic has dissipated, leaving the company with excess capacity in the U.S., which accounts for more than half of its global business,” reports Grocery Dive.
When Georgia’s governor announced in August 2020 that HelloFresh would be bringing its first distribution center in the Southeast to Newnan, meal kit sales were surging as people stuck at home because of the coronavirus crisis sought ways to bring variety to their dining tables.
But while HelloFresh declared at the time that the new facility was part of a long-term plan to expand in the U.S., the company said yesterday that it is now facing an entirely different reality.
“As the meal-kit segment has stabilized, we are now focused on diversifying our offerings and optimizing our operations network to best serve our customers and grow profitably,” the spokesperson said in an emailed statement, adding that it decided to shutter the facility southwest of Atlanta “following an extensive analysis of our production network and business needs.”
The company said it determined that it needed to streamline its capacity and take advantage of facilities “where we have invested in the latest technology and automation capabilities to best serve both new and existing customers.”
The spokesperson said the company intends to offer “financial support and relocation opportunities for eligible employees” who are losing their jobs as a result of the closure, without providing further details.
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Also Read: An Unexpected Retailer Is Now Closing All Stores in Illinois
Other Economy News Today
A massive clothing retailer is now closing all 540 stores in just six weeks after unexpectedly filing for bankruptcy.
Liquidation sales will be held at rue21 outlets across the US as bosses rush to clear the last remaining stock.
The clothing retailer has entered bankruptcy and bosses have announced plans to close all 540 remaining stores within six weeks, reports The US Sun.
It is the third time in less than 25 years the fashion retailer has entered bankruptcy, per Bloomberg.
Court documents seen by Reuters revealed the company has more than $190 million of debt.
The chain has 540 stores across the US and 4,900 workers are set to be impacted.
Outlets are to slam shut within four to six weeks, according to court papers.
Bosses also announced plans to sell the company’s intellectual property.
The company narrowly avoided going into bankruptcy in October 2022.
Chiefs filed for bankruptcy in 2017 as they rushed to clear around $700 million worth of debt.
Bosses shuttered 400 stores as well and renegotiated leases.
Execs identified the rise of online shopping and changing consumer trends as reasons behind the bankruptcy.
Michele Pascoe, the interim CEO, also alluded to the impacts of competition and inflation.
The company also filed for bankruptcy in 2002.
At its peak, the company had more than 1,000 stores across the US.
The chain has dozens of outlets across several states, including Florida, Georgia, Illinois, North Carolina, Pennsylvania and Texas.
The teen fashion retailer is not the only clothing chain that has entered bankruptcy over the past year.
Last month, Express chiefs filed for bankruptcy, and at least 100 stores are set to close.
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