Stitch Fix CEO out; announces layoffs
Stitch Fix is looking for a new chief executive.
Elizabeth Spaulding has stepped down as CEO and board member of the nearly 13-year old subscription-based, online service which sells personalized boxes of clothing. The company also let go 20% of its salaried employees and is closing its distribution center in Salt Lake City.
The moves were first announced in a blog to employees on the Stitch Fix site by company founder, board member and former CEO Katrina Lake. She will serve as interim chief executive for six months or until her successor is appointed (unless otherwise agreed by Lake and the board).
“I look forward to stepping back in to lead the business and working closely with the board of directors to identify a successor going forward,” Lake stated in a company release.
Spaulding joined Stitch Fix in 2020, and took the reins as CEO in August 2021. Prior to that, she was a senior partner and global head of Bain Digital at Bain & Company. Her departure comes as Stitch Fix has been struggling amid higher costs and a pullback in discretionary
spending. For its most recent quarter, the company posted revenue of $455.6 million, down 22% from the year-ago period.
“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,” stated Spaulding. “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.”
In her note to employees, Lake wrote that she was grateful for Elizabeth’s many contributions as president and then as CEO, “and am thankful for her leadership during what has been an unprecedented time for our business and the world.”
“Despite the challenging moment we are in right now, the board and I still deeply believe in the Stitch Fix business, mission and vision,” wrote Lake, who took the company public in 2017. (She was the youngest woman at the time to ever take a company public.)
Stitch Fix’s departing employees will receive at least 12 weeks of pay, which increases with tenure. They will also receive health care support through April 2023 and mental wellness support up to the end of April 2023, which also includes counseling, self-help tools, legal and financial services as well as online work/life balance advice.
Lake said the company will do everything possible to support those impacted to find new roles, including outplacement support and an opt-in alumni database where their profiles are accessible to potential employers.
“Our departing teammates have made valued contributions to Stitch Fix and any company will be lucky to have them on their teams,” she wrote.