Stitch Fix founder Katrina Lake on Thursday told employees the company will be cutting 20% 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.
“I will be stepping in as interim CEO and leading the search process for our next CEO,” Lake said Thursday. “Despite the challenging moment we are in right now, the board and I still deeply believe in the Stitch Fix business, mission, and vision.”
Shares of the company surged roughly 9% Thursday after the announcements and its market cap hovered around $386 million. Shares closed more than 9% higher at $3.50. Stitch Fix, which sells curated boxes of clothing on a subscription basis, won big during the Covid pandemic after stuck-at-home consumers, newly flush with cash, took advantage of the service to update their wardrobes. But as shoppers ventured back out into the world, sales dropped and new strategies led by Spaulding failed.