The Sew Repair brand on a smartphone organized in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Sew Repair Inc. is scheduled to launch incomes on June 7.
Tiffany Hagler-Geard | Bloomberg | Getty Pictures
Stitch Fix is shedding 15% of salaried positions inside its workforce, principally in company roles and styling management positions, in response to an inside memo that was seen by CNBC.
Shares of the corporate fell about 8% Thursday, to commerce round $7.97. Shares traded as excessive as $68.15 a 12 months in the past.
The job cuts come as the net styling service has been grappling with larger bills on all the things from its provide chain to advertising and marketing to labor, and it has additionally been struggling to onboard new customers.
“We have taken a renewed have a look at our enterprise and what’s required to construct our future,” Sew Repair CEO Elizabeth Spaulding stated within the memo. “Whereas this was an extremely troublesome resolution, it was one wanted to make to place ourselves for worthwhile development.”
The roughly 330 individuals have been notified of the cuts on Thursday morning, the memo stated. That quantity represents about 4% of the corporate’s general workforce.
The cutbacks at Sew Repair match into a broader trend shaping up within the U.S. labor market, as pandemic darlings equivalent to Peloton, Netflix and Wayfair turn into extra conservative with their hiring, however airways, eating places and hospitality chains nonetheless wrestle to fill roles.
The layoffs come three months after Sew Repair cut its revenue guidance for the year and withdrew its earnings forecast. Spaulding stated the corporate’s energetic shopper depend was not the place she wished it to be. As of Jan. 29, Sew Repair counted roughly 4 million energetic clients.
Sew Repair’s enterprise is solely on-line and that was seen as a brilliant spot throughout earlier levels of the Covid pandemic, as spending shifted on-line. Extra lately, its rollout of a direct-buy choice often called Freestyle did not go in addition to the corporate had hoped for. And increasingly more customers are shifting again to spending their cash in shops as pandemic restrictions elevate.
Sew Repair is about to report fiscal second-quarter outcomes after the market shut.
Its market cap has fallen under $1 billion, because the inventory has declined about 55% this 12 months.