For those of us who are firmly entrenched in the juice world, there was a very sad piece of news that broke yesterday on Eater, which has been confirmed by many of its employees: Organic Avenue has closed its doors for good.
What has not been reported is exactly why Organic Avenue has ceased operations.
My sources have given me the inside scoop, and here’s what happened.
As many people probably know, private equity firm Weld North purchased a controlling stake in the company in early 2013 from existing shareholders. The firm installed a new CEO, Martin Bates, formerly of Pret a Manger, but things did not go as planned.
So, over much of 2015, Weld North had been shopping the company to potential buyers with a rumored price tag of up to $60 million. With no buyers in sight and the company reported to be losing up to $1 million per month, Vested Capital Partners, a turnaround firm, swooped in and agreed to “take the keys” from Weld North for next to nothing this past August.
But just a few months in, Vested Capital Partners decided it couldn’t make it work either. Why?
I have been told that while some of the existing stores were doing really well and were cash-flow positive, some of the other stores were losing a lot of money. Overall, the company was cash-flow negative.
However, the real sticking point was that these money-losing stores had guaranteed leases and Vested Capital Partners, as hard as they tried, couldn’t get out of them. And the landlords were prepared to go to court to get their guaranteed money.
At the end of the day, the firm did not want to carry money-losing stores for another 7 years (the length of some of the leases), and this would be such a drag on the overall company finances that Vested Capital Partners decided to pull the plug on the entire operation.
None of this has been officially confirmed by the company, and as far as I can tell, Vested Capital Partners has refused to speak with anyone from the press, myself or others, since it took ownership of Organic Avenue a few months ago.
My information comes from people who are incredibly close to the situation yet are not authorized to speak for the company.
Health-conscious consumers who have been drinking pressed organic juice for a long time, particularly those of us who live in New York City, understand what a meaningful brand Organic Avenue is.
For many years, it was the cold-pressed organic juice bar of choice in Manhattan. People felt an incredibly close connection to the brand, drawn to its iconic glass bottles and its orange tote bags that you would see people carrying around everywhere in New York City. I hung out so much at my favorite yet tiny West Village location and was so upset about its closing that I wrote a special post about it when management decided to shutter its doors in early 2014.
Unfortunately, the company suffered from a lot of ownership and management turnover – four CEOs in four years isn’t exactly a recipe for success – and it was never able to recover.
Despite its demise, Organic Avenue helped paved the way for much of what is going on in today’s booming juice business, and founder Denise Mari and investor/CEO Doug Evans should be credited for pioneering an essential component of our ever-important health and wellness world.
(Below is one of my favorite interviews — with Doug Evans and raw food expert David Wolfe at an Organic Avenue event in 2011.)