By John Armour, The Chicago Times
May 14, 2023
CHICAGO – The Chicago-based online marketplace announced Wednesday it has terminated its lease agreement at its North Side headquarters, formally the headquarters of Montgomery Ward, as it faces economic challenges and reorganization.
Groupon also issued a “going concern” warning which could be an indication that the company could be insolvent by the end of the year.
“We recognize that turning our business around is going to be tough and that it won’t happen overnight,” interim CEO Dusan Senkypl told investors during the earnings call.
According to their first quarter earnings report, the company had a net loss of $29 million in the first quarter and held only $164 million in cash as of March 31.
The previous year, Groupon spent some $136 million for operations in the face of declining revenue. Groupon was recently taken over by famed Czech investor Dusan Senkypl who quickly replaced CEO Kedar Deshpand, former CEO of Zappos, as the interim CEO.
Senkypl, the largest single shareholder, controls 25% of Groupon and is now in the process of implementing an eight-point transformation strategy that has been disclosed in a letter to shareholders. Senkypl’s goal is to “fix” the supply-side of the marketplace by retaining local merchants with more flexible online offerings. Senkypl hopes to achieve this in the next twelve months.
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