Another popular retailer now declares an unexpected bankruptcy as modeling its competition proved to backfire.
Shift, which followed the Carvana blueprint, has shown that too many companies using the same disruptive business model leads to failure.
“Carvana has shown that people want a different way to buy and sell used cars, but copycats including Vroom and Shift Technologies have shown that when a company does not have a proprietary business model, competition can kill,” reports TheStreet.
“But just because people want to buy and sell cars without the sleaziness associated with traditional car dealers does not mean that multiple companies can succeed.
We’re seeing the same issues in ride-sharing and food delivery, where too many companies using the same business model lead to an inability to raise prices.
Shift has fallen victim to the fact that too many players in the used-car space use similar disruptive models.
That makes the price of acquiring customers too high, especially for a company that’s arguably No. 3 at best in a race where even market leader Carvana may ultimately run out of money.”
Shift Technologies disclosed that it intends to file a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code, to implement an orderly wind-down of its business.
“To facilitate the process, the company will utilize cash on hand and cash generated by the liquidation of inventory through wholesale channels to provide the necessary liquidity to support the wind down and closure of operations during the Chapter 11 process,” Shift stated.
The company has closed its retail locations, and its website no longer offers any services.
“This decision follows months of trying to raise capital and restructure the balance sheet to allow the company to operate unencumbered in this challenging environment,” Chief Executive Ayman Moussa said in a statement.
Also Read: A US Company Now Declares An Unexpected Bankruptcy
Other Economy News Today
Massachusetts now becomes the next state to experience massive layoffs according to the latest MassHire Department of Career Services data.
“Layoffs continue to hit businesses in Massachusetts this year.
Under the Worker Adjustment and Retraining Notification Act, an employer with more than 100 full-time workers must provide a 60-day notice before laying off 50 or more people at a single site,” reports Ash Jurberg.
California remains the #1 state with the most layoffs in the country.
In second place is Colorado, with approximately 26,816 layoffs and 81 WARN notices, followed by Illinois, Washington, New York, Texas, New Jersey, Florida, and Michigan.
Upcoming layoffs in Massachusetts has grown drastically as more than 5,500 jobs are expected to shutter by the end of the year.
Below is a list of upcoming layoffs scheduled to take place in Massachusetts by year’s end.
- SunSetter Products. 54 jobs cuts in Malden
- Starry. 57 jobs cuts in Boston
- Wayfair. 932 jobs cuts in Boston
- Resilience US. 213 jobs cuts in Allston
- Jounce Therapeutics. 77 jobs cuts in Cambridge
- MassBiologics. 26 jobs cuts in Mattapan
- Sunsetter Products. 54 jobs cuts in Malden
- Pear Therapeutics. 78 jobs cuts in Boston
- Takeda Development Centers America. 185 jobs cuts in Cambridge and Lexington
- Path AI. 51 jobs cuts in Boston
- Quad/Graphics. 58 jobs cuts in Leominster
- Community Healthlink. Jobs cut in Worcester
- Thayer Detoxification. 39 jobs cuts in Worcester
- Thayer PASSages. 21 jobs cuts in Worcester
- Transitional Support Systems. 18 jobs cuts in Worcester
- Sunovian Pharmaceuticals. 223 jobs cuts in Marlborough
- Makita USA. 4 jobs cuts in Norwood
- Takeda – Shire Human Genetic Therapies. 42 jobs cuts in Lexington
- The Rockport Company. 148 jobs cuts in Newton
- Greenlight Biosciences. 96 jobs cuts in Lexington
- Transdev Services. 137 jobs cuts in Taunton, Plymouth
- Owens & Minor. 61 jobs cuts in Franklin
- Blue Harvest Fisheries. 57 jobs cuts in New Bedford
View the rest of the list here.
Also Read: A US Bank is Now Denying Customers Access to Money
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