Stitch Fix Announces Layoffs Amid CEO Shakeup
Stitch Fix founder Katrina Lake on Thursday told employees the company will be cutting 20 percent of its salaried workforce and she will reassume her post as CEO as the fledgling apparel company continues to grapple with low sales, a dwindling customer base, and a reduced market cap. The brand’s current CEO, Elizabeth Spaulding, who joined the company as president in 2020 and took over as CEO in August 2021, will be stepping down effective immediately, Lake said. Stitch Fix's Salt Lake City distribution center, which has been open for just over a year, will also be shuttering. Approximately 150 employees at that center will also be laid off.
Total Retail's Take: Forced to take drastic action, Stitch Fix is trying to put itself in a better financial position by cutting costs and looking for new leadership. The apparel retailer has been challenged by a decline in subscribers for its curated boxes, which are core to the business. A direct-buy option, introduced during Spaulding's tenure, failed to drive the uptick in sales and new subscribers that Stitch Fix envisioned for the program. With consumer confidence wavering and a recession seemingly likely, Stitch Fix and other businesses like it are going to have to find unique and creative ways to entice shoppers to spend on discretionary items like new clothes. It's now up to the company's founder, who helped lead its growth, to get Stitch Fix back on the right path.