Glossier And Peloton Stumble, Cut Jobs, Revaluate Strategies

Glossier and Peloton, two of the highest profile D2C companies, are both reeling, announcing job cuts and revamping marketing strategies. They need to try something new to woo back formerly fervent customers.

For Peloton, the bad news comes as people begin to return to gyms and fitness studios, turning their backs on Peloton’s home-workout equipment and digital subscriptions. Back in November, the company slashed its sales forecast by $1 billion.

Last week, it announced it is “taking significant corrective actions to improve our profitability outlook and optimize our costs across the company. This includes gross margin improvements, moving to a more variable cost structure, and identifying reductions in our operating expenses.”

Business Insider reports those moves may include eliminating over 40% of its sales and marketing team and cutting jobs in ecommerce and its retail stores.

CNBC says Peloton has stopped producing its connected fitness products and hired McKinsey & Co. to look for cost redundancies.

The company also announced it would begin charging fees for delivery and assembly of its products, including bikes and treadmills. That can add hundreds to the cost of the equipment, already considered pricey.

All that glum news has driven Peloton's stock price into the ditch. In December of 2020, it traded as high as $163 per share, while last week, its share price hovered around $25.

News isn’t much better at Glossier, perhaps the best-known venture-backed beauty company. It’s been a darling of the D2C crowd since its launch back in 2012, founded by beauty blogger Emily Weiss. It achieved unicorn status in 2019 and began opening experimental and innovative retail stores to introduce shoppers to its beauty products.

Modern Retail reports that the company laid off 80 people, many from the tech and digital side. That’s about a third of its staff. The publication quotes from an internal email it obtained, with Weiss admitting the company had become “distracted” from its core beauty business.

Glossier can’t blame its problems on declining interest in beauty products. The NPD Group just released its annual analysis of the prestige beauty category, which rose 30% to $22 billion.

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