CafePress Acquired by Snapfish for $25M Amid Recent Struggles
CafePress, based in Louisville, Ky., said it would sell each of its approximately 17 million outstanding shares to Snapfish for $1.48 per share, and would give Snapfish access to "over one billion content items," per Insider Louisville.
Based on the last year or so, it feels like the move has been a long time coming. Here's what CafePress has done just in the last few months:
- March 2018: Reported 16 percent revenue drop and 22 percent gross profit drop for 2017
- March 2018: Announced layoffs and the departure of board members and COO Robert D. Barton
- May 2018: Cited struggles adapting to new search algorithms, discussed new strategies such as partnering with e-commerce platforms like eBay, Amazon and Walmart
- August 2018: Reported 19 percent revenue drop for second quarter 2018, despite some growth areas
Despite the one silver lining in August, where CafePress reported growth in its retail partner channels, it's been a dismal year for the company, especially at a time where nominal competitors like Vistaprint and TeeSpring are doing noticeably better.
One of CafePress' biggest problems was updates to Google's search algorithm, which pushed the company out of the top search results for many important product categories. The acquisition has CafePress hopeful that it will "have access to additional manufacturing, marketing and merchandising capabilities" it was unable to find on its own, while providing Snapfish with "a massive array of designs" and "major entertainment properties."
"Today marks a crucial turning point in our pursuit to return CafePress to its market leading position in the personalized and expressive gift category," CafePress founder and CEO Fred Durham said in a statement. "We are excited about the opportunity to accelerate growth by leveraging our content portfolio across Snapfish's distribution channels. We take great pride in being the pioneer of offering personalized and custom merchandise to consumers and believe this transaction provides an opportunity to further our leading position as well as return value to our stockholders.”
"We are looking forward to welcoming CafePress and its employees into the Snapfish organization, and working with them during the next phases of each company's evolution," Jasbir Patel, CEO of Snapfish, said. "Since its beginning in 1999, CafePress has been a leader in print-on-demand, personalized and custom merchandise because of its design community and best-in-class manufacturing capabilities. We look forward to leveraging CafePress' highly efficient and innovative manufacturing process to further enhance our manufacturing capabilities. We are excited to combine our efforts to provide our customers more options and more value."
According to Nasdaq, CafePress stock was up 12 percent as of noon on Friday, when the acquisition was first announced, but was down 30 percent year-to-date.
Other details, like local employment repercussions or operations, were not disclosed at this time.