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Beauty brand Morphe is closing its US stores. Pullback or visionary?
A Morphe store. (Morphe Cosmetics Dadeland Mall Miami | Phillip Pessar | Flickr www.flickr.com)
Beauty brand Morphe is closing its own-brand US stores and shifting its focus to digital and wholesale channels.
“We have made the difficult decision to close all Morphe stores in the U.S.,” the brand wrote on Twitter. “We are forever grateful to our store teams for their passion, talent and dedication over the years.”
A spokesperson provided a more detailed statement to WWD:
“Following a careful evaluation of all aspects of our business, we have made the strategic decision to enhance our focus on the company’s wholesale and ecommerce operations going forward. We believe this shift will position Morphe to better compete in the broader beauty landscape and more efficiently reach our customers where and how they shop.”
Here’s the quick history of the brand:
Founded in 2008 by Chris and Linda Tawil, Morphe grew from a makeup brush company into a global beauty brand by combining the DTC tactics of low prices and influencer partnerships that helped its products go viral, Bloomberg reported.
Eventually, it opened a slate of physical stores that grew to about 20 locations in the US, per its website. It has 11 international stores, and is available at hundreds of wholesale locations through Target, Ulta Beauty and Sephora Canada.
In 2019, investment firm General Atlantic purchased a 60% equity stake in the brand, valuing it at $2.2 billion.
In 2020, it became a portfolio company of Forma Brands, which was positioned as an incubator of next-gen beauty brands. But in October of this year, Forma signaled that it was mulling bankruptcy. As Beauty Packaging wrote at the time struggles were traced to the pandemic-prompted dip in demand for color cosmetics sales, supply chain issues and the severing of its partnerships with influencers Jeffree Star and James Charles over controversies in subsequent years.
Two views on what this means:
More belt tightening: On one hand, this is another pullback in a tough week for retail. Amazon, Stitch Fix, Helen of Troy and Everlane all announced layoffs, while Macy’s said it will close four locations and Bed Bath & Beyond said it is considering bankruptcy. Boxed is exploring a possible sale. The economic about-face wrought by inflation is leading to a post-holiday shakeout that is happening just days into 2022, and Morphe could be another example. Forma’s move to raise the specter of bankruptcy is an especially worrying sign.
Digital + Wholesale: On the other hand, the focus on ecommerce and wholesale could be a sign of the times, as well. Once, opening stores was a path to achieve a new level of growth for digitally-native brands. But deals signed by darlings like Glossier and Allbirds in the last year have proven that there is opportunity in wholesale, as well. Operating stores is expensive, and it becomes even more difficult to drive traffic without wraparound services that give people a reason to visit (Think: Warby Parker’s eye exams). It begs the question, will more brands see ecommerce + wholesale as a viable strategy going forward? Perhaps Morphe will be a trendsetter once again.On the Move has hiring news from Walmart US, Etsy, commercetools and more.
Judy Werthauser. (Photo via LinkedIn)
This week, retailers are bringing on C-level talent in areas such as people, operations and transformation. Plus, Kohl’s appoints an activist investor’s choice for CEO, Fanatics taps a former Snap executive for livestream shopping and Etsy brings aboard Facebook’s former general counsel.
Tom Kingsbury was appointed CEO of Kohl’s. Kingsbury was named interim CEO in December upon the resignation of now-Levi’s President Michelle Gass. Now, Kingsbury will have the job on a permanent basis. Kingsbury served as CEO of Burlington Stores from 2008-2019. Kingsbury was nominated by activist investor Macellum Advisors, which was pushing for change at Kohl’s. With Kingsbury’s appointment as CEO, Macellum has agreed to a “multi-year standstill.”
Judy Werthauser was appointed chief people officer at Walmart U.S. Werthauser comes to the teen-focused retailer from Five Below, where she served as EVP and chief experience officer. Over her four-year tenure, the chain grew from about 750 stores to more than 1,300 locations. Werthauser also served on the board of BJ's Wholesale Club, and is now resigning from that position. “I am excited to work alongside the world-class Walmart U.S. team as they bring the purpose of building a better world – helping people live better and renewing the planet while building thriving, resilient communities – to life,” Werthauser wrote in a LinkedIn post.
Mike Brewer was named chief operating officer at Crate & Barrel Holdings, overseeing operations at Crate & Barrel, CB2, Crate & Kids and Hudson Grace. Brewer brings 20 years of experience from Nike, where he served in roles including sourcing, manufacturing and supply chain. Crate & Barrel said Brewer’s appointment was part of the home retailer’s “ongoing efforts to evaluate and alter its structure in ways that help support overall growth.”
Keith Melker. (Courtesy photo)
Keith Melker was appointed chief strategy and transformation officer at JCPenney. Melker comes to the department store retailer from Wehner Multifamily, where he served as CEO. He was also a previous chief strategy officer at the Kimberly-Clark Corporation. Melker will oversee the transformation office, which includes ownership of metrics such as profitable traffic, inventory management, digital growth and strategic partnerships. With this move, Katie Mullen will remain chief strategy officer.
Blaine Trainor is joining ecommerce software provider commercetools as VP of global partnerships and alliances. In the role, Trainor will lead the headless commerce company’s partnerships ecosystem, working with companies including Deloitte, CapGemini, AWS and Google Cloud. Trainor previously served in senior leadership roles at SAP over a 12-year tenure, and also held sales roles at hybris software and Sterling Commerce.
Nick Bell, a former Google and Snap executive, will lead a new livestream shopping division of Fanatics, Footwear News reported. Bell previously led the teams behind Google Search Experience, and served as VP and global head of content and partnerships at Snap Inc. Bell will lead the Fanatics Live division, which will launch a standalone app that is geared toward collectibles.
NIck Bell. (Photo via LinkedIn)
Colin Stretch was appointed chief legal officer at corporate secretary at Etsy, effective Feb. 14. Stretch previously served as general counsel at Facebook from 2013-2019. He then spent two years as leader in residence at Columbia University Law School's Reuben Mark Initiative for Organizational Character & Leadership, and went on to the law firm Latham & Watkins.
"Colin's extensive experience will be critical to Etsy's efforts to ensure we remain a safe and trusted marketplace, broaden our reach across all our brands, and advocate for microbusinesses around the world,” said CEO Josh Silvermann, in a statement.