Incoming Stitch Fix CEO Elizabeth Spaulding told CNBC on Thursday that the company is confident in the timing of its executive shake-up, explaining that the coronavirus pandemic “accelerated everything” for the online styling service.
Spaulding, who currently serves as president, will take over from founder and CEO Katrina Lake on Aug. 1. Lake, who started Stitch Fix in 2011 and made it public six years later, will then make the move to become executive chairman of the company’s board.
While it’s not uncommon for start-up founders to step down as CEO as their company matures, the Stitch Fix announcement on Tuesday nevertheless surprised some industry observers and analysts. The company’s stock fell as a result of the news.
“Really, the timing felt right,” Spaulding said in an interview about “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.”
More consumers turned to online shopping during the pandemic, especially for apparel, which plays into Stitch Fix’s core identity, Spaulding noted. The company is now seeing the benefits as the economy is recovering from Covid’s slowdown and consumers are resuming what they have shrunk from.
“In the past two quarters, we added more clients in those quarters than in a very fiscal sense [2020]said Spaulding, who 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 individually select for the customer based on their preferences. Customers only pay for what they keep and a styling fee is also charged.
In addition to clothing shipments to customers on a regular basis, 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 her focus would be “driving the next phase of Stitch Fix’s growth,” including the direct purchase offering.
In addition to boosting online apparel sales, the pandemic has “accelerated roles for us as a leadership team,” Spaulding told CNBC.
“It deepens the relationship of all executives going through a crisis,” she said. But the pandemic “also really enabled Katrina and I to divide and overcome and for me to play a part in shaping this next chapter and the future of the company, to focus on the innovation within. our model and really 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 of directors. “We joke that we’ll be bosses,” Spaulding said.
[Lake] will be strongly focused on social impact, both on sustainability and on the role we can play in the clothing chain; diversity, equality and inclusion; and things around brand partnerships and things that are really areas that are her strength, “Spaulding said. So we feel like we’re getting the best of both as each of us continues to play a huge role in the business. “