Incoming Stitch Fix CEO says 'timing felt right' for executive transition

Incoming Stitch Fix CEO Elizabeth Spaulding informed CNBC on Thursday the corporate is assured within the timing of its executive shakeup, explaining that the coronavirus pandemic “accelerated everything” for the web styling service.

Spaulding, who at present serves as president, is about to take over the reins from founder and CEO Katrina Lake on Aug. 1. Lake, who began Stitch Fix in 2011 and took it public six years later, will then transition to executive chairperson of the corporate’s board.

While it is commonplace for start-up founders to step down as CEO as their firm matures, Stitch Fix’s announcement Tuesday nonetheless caught some trade observers and analysts abruptly. The firm’s inventory fell following the news.

“Really, the timing felt right,” Spaulding stated Thursday in an interview on “Closing Bell.” “Covid has accelerated everything for us as a business, and over the course of the last year, we’ve really been able to invest in our future.”

More shoppers turned to on-line purchasing throughout the pandemic, especially for apparel, which performs into Stitch Fix’s core id, Spaulding famous. The firm is seeing the advantages now because the economic system recovers from the Covid slowdown and shoppers resume actions they shied away from.

“In the last two quarters, we added more clients in those quarters than we did in all of fiscal [2020],” stated Spaulding, who joined San Francisco-based Stitch Fix in January 2020 after greater than twenty years at Bain & Company.

Stitch Fix is thought for sending its purchasers a field of things, which workers individually choose for the client primarily based on their preferences. Clients solely pay for what they hold, and a styling price is also utilized.

Outside of clothes shipments to purchasers regularly, Stitch Fix has added a direct-buy possibility in recent times.

When Spaulding’s rent was introduced in late 2019, a press release said a part of her focus can be on “driving the next phase of Stitch Fix’s growth,” which incorporates the direct-buy providing.

In addition to pushing ahead on-line clothes gross sales, the pandemic “accelerated the roles for us as a leadership team,” Spaulding informed CNBC.

“It deepens the relationship of any executives going through a crisis,” she stated. But the pandemic “also really allowed Katrina and I to divide and conquer and for me to play a role of shaping this next chapter and future of the business, to focus on the innovation within our model and really the table with our future team.”

Spaulding famous that Lake will stay an worker of Stitch Fix, alongside together with her function as executive chairperson of the board. “We kind of joke around we’ll be each other’s bosses,” Spaulding stated.

“[Lake] will be focused very heavily around social impact, both on sustainability and the role we can play in the apparel supply chain; diversity, equity and inclusion; and things around brand partnerships and things that are really areas that are her strength,” Spaulding stated. “So, we kind of feel like we’re getting the best of both with each of us continuing to play a big role within the business.”