Elizabeth Spaulding, CEO of Incoming Stitch Fix, told CNBC on Thursday that the company was confident that the top management restructuring at the time of the coronavirus restructuring had “accelerated” everything that “accelerated” the online styling service.
Spaulding, currently serving as president, will take over from founder and CEO Katrina Lake on August 1st. Lake, who founded Stitch Fix in 2011 and floated it six years later, will become Executive Chairman of the company’s board of directors.
While it’s not uncommon for start-up founders to step down as CEO as their company matures, Stitch Fix’s announcement on Tuesday surprised some industry watchers and analysts nonetheless. The company’s shares fell after the news.
“Really, the timing felt right,” said Spaulding in an interview on Closing Bell on Thursday. “Covid has accelerated everything for us as a company and over the past year we have really been able to invest in our future.”
During the pandemic, more and more consumers turned to online shopping, especially apparel, which is part of Stitch Fix’s core identity, Spaulding said. The company is seeing the benefits now as the economy recovers from the slowdown in Covid and consumers resume activities they shy away from.
“In the past two quarters, we added more customers in those quarters than in the entire fiscal year ”said Spaulding, who joined Stitch Fix in San Francisco in January 2020 after more than two decades with Bain & Company.
Stitch Fix is known for sending its customers a box of items that the staff individually select based on their preferences for the customer. Customers only pay for what they keep and there is also a styling fee.
Outside of the regular delivery of clothing to customers, Stitch Fix has added a direct purchase option over the past few years.
When Spaulding’s hiring was announced in late 2019, a press release said part of their focus would be on “driving the next phase of Stitch Fix’s growth,” which includes the direct purchase offering.
Not only has the pandemic spurred online apparel sales, it has “accelerated our role as a leadership team,” Spaulding told CNBC.
“It deepens the relationship of all leaders who are in crisis,” she said. But the pandemic “really allowed Katrina and me to share and conquer, and for me to play a role in shaping this next chapter and the future of the business, to bring me to the innovation within our model and really to the table focus with our future team. “
Spaulding noted that in addition to her role as CEO, Lake will continue to work for Stitch Fix. “We joke that we’re each other’s bosses,” said Spaulding.
“”[Lake] will have a very strong focus on social impact, both sustainability and the role we can play in the apparel supply chain; Diversity, equity and inclusion; and things about brand partnerships and things that are really their strengths, “said Spaulding.” So we feel like we’re getting the best out of both, with each of us continuing to play a huge role in the business. “”