- ThirdLove, the buzzy lingerie upstart that was trying to challenge Victoria's Secret's dominance, has laid off about 30% of its employees as the coronavirus crushes direct-to-consumer brands and other companies.
- The layoffs came after the company closed its pop-up brick-and-mortar store last month, when it let go 10 staffers in New York City, and cut roles at its customer-experience center in Chico, California, in late February before the coronavirus started shuttering businesses.
- Direct-to-consumer companies have been facing increasing headwinds in the face of the coronavirus pandemic, and some cut staff as a slowdown in consumer spending hit their retail business.
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ThirdLove is the latest direct-to-consumer startup to be hit by layoffs.
The buzzy lingerie company that's challenging Victoria's Secret has laid off 65 employees — which is nearly 30% of its employees, sources with knowledge of the layoffs told Business Insider. The cuts took place this week at the company's San Francisco headquarters and affected employees across teams such as logistics, recruiting, design, data, customer experience, and marketing, two sources said.
ThirdLove cofounder and co-CEO Heidi Zak told Business Insider the company made the cuts because the business has been affected by the coronavirus pandemic.
"We've had to make difficult decisions, including closing our pop-up store in New York City, reducing spending overall, and saying goodbye to some of our beloved teammates because of events completely outside of our control," she said. "We are making sure that ThirdLove is positioned to succeed in the long term and are focused on our responsibility to our stakeholders, current teammates, our millions of customers, and our many donation partners."
The layoffs were communicated individually by team leaders and one other member of the leadership team, and each person was offered extended benefits and provided two weeks of severance or more, depending on tenure, a company spokeswoman said. Some employees also took pay cuts.
The cuts were relayed to affected employees via Google Hangouts on Tuesday, with calendar invites sent out a few hours earlier, one of the sources said.
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The layoffs come on the heels of the company closing its pop-up brick-and-mortar store and laying off 10 staffers in New York City last month.
The company also cut its customer-experience team in Chico, California, before the coronavirus spread in late February, asking employees to move to other roles with reduced salaries or leave, one of the sources said.
At that time, the company announced the creation of new customer-facing positions called "Fit Experts" and eliminated three non-customer-facing positions, the spokeswoman said. 17 others, who were previously in non-customer-facing positions, were offered these new roles, with 13 among the 17 having no changes in salaries, she said.
ThirdLove was launched in 2013 and became known for its online bra-sizing tool, Fit Finder, and its anti-Victoria's Secret stance. Its ads have emphasized its products through customer testimonials rather than models posing in lingerie. Last year, it took out a full-page ad slamming Victoria's Secret in The New York Times.
Other direct-to-consumer companies, such as the beverage startup Iris Nova, have cut staff as consumer spending declines in the face of the coronavirus pandemic. Online spending on direct-to-consumer products week over week fell 7% on average between March 2 and 22, with ThirdLove's falling 39% week over week during the week of March 16, according to Edison Trends data.
ThirdLove has raised close to $68 million to date, most recently raising $55 million in February 2019 in a round of funding led by the consumer-focused private-equity firm L Catterton.
Got a tip about what's going on at another direct-to-consumer company? Contact this reporter via encrypted messaging app Signal at +1 (646) 702-2530, email at tdua@businessinsider.com, or Twitter DM at @tanyadua.