Elizabeth Spaulding, incoming president of Stitch Fix, told CNBC on Thursday that the company is confident at the time of its executive shake-up, explaining that the coronavirus pandemic “accelerated everything” for the online style service.
Spaulding, who currently holds the presidency, will 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 move on to the executive chair of the works council.
While it’s not uncommon for start-up company founders to step down as CEO as their business matures, the Stitch Fix announcement on Tuesday surprised some industry observers and analysts by surprise. The company’s shares fell as a result of the news.
“Really, the timing felt right,” Spaulding said Thursday in an interview with Closing Bell. “Covid has accelerated everything as a company and, over the past year, we have been able to invest in our future.”
More consumers turned to online shopping during the pandemic, especially for making garments, which play the basic identity of Stitch Fix, Spaulding noted. The company now sees profits as the economy recovers from Covid’s slowdown and consumers resume activities they shied away from.
“In the last two quarters, we added more customers in these quarters than in all fiscal quarters [2020]said Spaulding, which joined San Francisco-based Stitch Fix in January 2020 after more than two decades at Bain & Company.
Stitch Fix is known for sending its customers a box of items that employees select individually for the customer based on their preferences. Guests only pay for what they keep and a style fee also applies.
Outside of regular clothing shipments to customers, Stitch Fix has added a direct purchase option in recent years.
When Spaulding’s hiring was announced in late 2019, a press release said part of its focus would be to “drive the next phase of Stitch Fix growth,” which includes the direct purchase offer.
In addition to driving online clothing sales, the pandemic “accelerated our role as a leadership team,” Spaulding told CNBC.
“It deepens the relationship of executives suffering a crisis,” he said. But the pandemic “also allowed Katrina and us to divide and conquer and for me to play a role in shaping this next chapter and future of the business, to focus on the innovation of our model and really the table with our future team “.
Spaulding noted that Lake will continue to be an employee of Stitch Fix, along with her role as executive chairman of the board. “We fool ourselves the way we will be the leaders of others,” Spaulding said.
“[Lake] it will focus heavily on social impact, both on sustainability and the role we can play in the clothing supply chain; diversity, equity and inclusion; and things related to brand associations and things that are really their strengths, “Spaulding said.” Therefore, we feel that we are getting the best of both and each of us continues to play an important role within the business. “