Elizabeth Spaulding, CEO of Stitch Fix, told CNBC on Thursday that the company is confident in the timing of its upheaval, explaining that the coronavirus pandemic ‘accelerates everything’ for the online styling service.
Spaulding, who currently serves as president, will take over the reins from founder and CEO Katrina Lake on August 1. Lake, which started Stitch Fix in 2011 and announced six years later, will then move to executive chairman of the company’s board.
While it is not uncommon for start-up founders to retire as CEO as their company expires, Stitch Fix’s announcement on Tuesday nevertheless surprised some observers and analysts in the industry. The company’s stock dropped after the news.
“The timing really felt right,” Spaulding said in an interview on “Closing Bell” on Thursday. “Covid has accelerated everything for us as a business, and over the past year we have been able to really invest in our future.”
More consumers turned to online shopping during the pandemic, especially for clothing, which plays into the core identity of Stitch Fix, Spaulding noted. The company now sees the benefits as the economy recovers from the slowdown in Covid and consumers resume activities for which they scrambled away.
‘In the last two quarters, we added more customers in those quarters than in all fiscal [2020], ”Said Spaulding, who settled 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 that employees select individually for the customer based on their preferences. Customers only pay for what they like, and a style fee is also charged.
In addition to clothing that is regularly shipped to customers, Stitch Fix has added a direct purchase option over the past few years.
When Spaulding’s lease was announced at the end of 2019, a press release said part of her focus would be on driving the next phase of Stitch Fix’s growth, which includes the direct buy offer.
In addition to the advancement of online clothing sales, the pandemic has ‘accelerated the roles for us as a leadership team’, Spaulding told CNBC.
“It deepens the relationship between managers going through a crisis,” she said. But the pandemic “also allowed Katrina and I to really divide and conquer and to play a role for me in shaping this next chapter and future of the business, to focus on the innovation within our model and really to the table with our future team. “
Spaulding noted that Lake will remain an employee of Stitch Fix, along with her role as executive chairman of the board. “We joke so much that we’ll be each other’s bosses,” Spaulding said.
“[Lake] will be very focused on social impact, both on sustainability and the role we can play in the clothing supply chain; diversity, fairness and inclusion; and things around brand partnerships and things that are really the strongest, “Spaulding said. So we feel like we are getting the best of both, while each of us continues to play a big role in the business. “