Stitch Fix CEO Elizabeth Spaulding told CNBC on Thursday that the company is confident when the executive resumes, explaining that the coronavirus pandemic has “accelerated everything” for the online styling service.
Spaulding, who currently serves as president, is set to take over the reins of founder and CEO Katrina Lake on August 1st. Lake, who started Stitch Fix in 2011 and made it public six years later, will then move on to the company’s executive chairman.
Although it is not uncommon for start-up founders to step down as CEO as their company matures, the Stitch Fix announcement surprised some industry observers and analysts on Tuesday. The company’s shares fell following the news.
“Indeed, the time felt right,” Spaulding said in an interview with Closing Bell on Thursday. “Covid has accelerated everything for us as a business, and over the past year we have really been able to invest in our future.”
Several consumers have turned to online shopping during the pandemic, especially for clothing, which plays the basic identity of Stitch Fix, Spaulding noted. The company now sees benefits as the economy recovers from the Covid slowdown and consumers resume their evaded activities.
“In the last two quarters, we added more customers in those quarters than we did in all tax quarters. [2020]”said Spaulding, which joined Stitch Fix in San Francisco in January 2020 after more than two decades at Bain & Company.
Stitch Fix is known for sending its customers a box of items, which employees select individually for the customer based on their preferences. Customers pay only for what they keep and a style charge applies.
In addition to regularly delivering clothing to customers, Stitch Fix has added a direct purchase option in recent years.
When it was announced that Spaulding would be hired at the end of 2019, a press release said that part of its focus would be on “leading the next phase of Stitch Fix growth”, which includes the direct purchase offer.
In addition to promoting online clothing sales, the pandemic “accelerated roles for us as a leadership team,” Spaulding told CNBC.
“It deepens the relationship of any executives going through a crisis,” she said. But the pandemic “also allowed Katrina and I to share and conquer and for me to play a role in shaping the next and future chapter of the business, to focus on innovation in our model and in -truth on the table with our future team “.
Spaulding mentioned that Lake will remain an employee of Stitch Fix, along with her role as executive chairman of the board. “We’re kind of kidding that we’re going to be the bosses,” Spaulding said.
“[Lake] will focus very strongly on the social impact, both on sustainability and on the role we can play in the clothing supply chain; diversity, equity and inclusion; and things related to brand partnerships and things that are really areas that are its strength, “Spaulding said. So, we feel that we are both happy, each of us continuing to play an important role in the business. “