Food52 bought a furniture company at $48M — then collapsed into Chapter 11

Food52 was founded in 2009 by Amanda Hesser and Merrill Stubbs as a recipe-sharing site. It won a James Beard Award and reached $30M revenue by 2018. In 2019, private equity firm TCG bought a majority stake for $83M, and invested another $80M in 2021 to fuel growth.

In 2021, Food52 acquired Schoolhouse, a furniture company, for $48M. The deal merged an ecommerce business with a manufacturing company, creating high fixed costs with no synergy. Revenue fell from $160M to $74.7M, while the acquisition debt remained.

By December 2025, Avidbank swept Food52's cash without warning, triggering a liquidity crisis. The company laid off 80% of staff and filed for Chapter 11 on December 29. America's Test Kitchen bought it for $6.5M, providing $3.4M in financing to keep the lights on.

Merged an ecommerce business with a manufacturing company, creating high fixed costs and no synergy; revenue fell from $160M to $74.7M, and the debt stayed.

The $48M Schoolhouse acquisition saddled Food52 with debt and merged incompatible business models — an ecommerce company with a manufacturing company — creating high fixed costs with no synergy.

TCG's growth-at-all-costs strategy pushed Food52 to acquire rather than build, leaving the company with debt it could not service when revenue declined from $160M to $74.7M.

CEO turnover and the departure of both co-founders left the company without strategic direction during the downturn.

Avidbank's unexpected cash sweep on December 15, 2025, triggered an immediate liquidity crisis that forced the company into bankruptcy.

Acquiring a business in a different category is a bet, not a strategy. When the bet fails, the debt stays — and the company it was meant to save collapses with it.