On Thursday, Stitch Fix announced that CEO Elizabeth Spaulding would be leaving the company and that it would be laying off 20% of its salaried employees due to economic challenges. The decision was made due to the company’s struggles with low sales, a declining customer base, and a reduced market value.
The online retailer of personalized clothing subscriptions also announced that it would be shutting down some of its operations, including a distribution centre located in Salt Lake City.
Reportedly, Katrina Lake, founder of Stitch Fix, informed employees on Thursday that she would be returning to the position of CEO.
Lake mentioned in her blog post, “I will be stepping in as interim CEO and leading the search process for our next CEO. Despite the challenging moment we are in right now, the board and I still deeply believe in the Stitch Fix business, mission and vision.”
Lake had previously served as CEO before handing over the role to Spaulding, who joined the company in 2019 and became CEO in 2021. After the announcement, the company’s stock rose by 9 per cent.
In June 2022, Stitch Fix terminated the employment of 15% of its salaried staff, approximately 330 employees, due to slowing growth in the e-commerce retail industry. The company, which was founded in 2011 and went public in 2017, experienced success in the past, but has recently struggled with the shift towards in-store shopping and decreased online spending. Additionally, the company has faced increased costs. As a result, the company’s stock has decreased in value by more than half this year and is now worth less than $1 billion.
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