Stitch Fix CEO departs, cuts workforce by 20%
Stitch Fix announced on Thursday the departure of Elizabeth Spaulding from her role as chief executive officer, effective immediately, coinciding with the news the subscription platform is reducing its workforce by 20%.
The San Francisco-based company said Spaulding will be replaced in interim by founder and former chief executive officer, Katrina Lake, until her successor is appointed.
“Stitch Fix continues to embark on an ambitious transformation and in the immediate term, the focus for the team is squarely on creating a leaner, more nimble organization to set the company up for a return to profitability. First as president and then as CEO, it has been a privilege to lead in an unprecedented time, and to chart the course for the future with the Stitch Fix team. It is now time for a new leader to help support the next phase. With that context, the Board and I have made the difficult decision that I will step down as CEO," Spaulding said.
“I am proud of the new leadership team we have built, the evolution in culture we’ve created, and the products we’ve shipped. More than anything, it is a privilege to serve our clients and create many delightful moments in their lives.”
Coinciding with the departure news, the company sent an internal email to employees on Thursday advising that some 20% of salaried positions will cease at Stitch Fix, effective immediately. In addition, the company said it is closing its Salt Lake City distribution center, where its team is also "impacted," it read.
"We will be losing many talented team members from across the company and I am truly sorry. Everyone will get an email soon letting you know what this means for you," concluded the email.
The workforce cuts and CEO departure come on the back of a series of lacklustre quarterly updates from the U.S. online fashion platform.
In its most recent trading update in November, Stitch Fix announced revenues for the first quarter plummeted by double digits, on the back of a decrease in active users during the three months ending October 29.
The company recorded net revenues of $455.6 million, a decrease of 22% year-over-year. Active clients fell to 3.7 million, a decrease of 471,000 or 11% year-over-year, with the company blaming a challenging "macro-environment" for the declines.
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