The Current, delivered daily.
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.
Trending in Retail Channels
On the Move has the latest from Amazon, Lovesac and more.
This week, leadership is changing at GameStop, Sorel and Beautycounter. Meanwhile, key executives are departing at Amazon, Wayfair and Lovesac.
Here’s a look at the latest shuffles:
GameStop CEO fired
GameStop announced the termination of Matthew Furlong as CEO on Wednesday. A brief statement did not provide a reason for the firing.
With the move, Chewy founder and activist investor Ryan Cohen was named executive chairman of the video game retailer. Cohen will be responsible for capital allocation and overseeing management.
It came as the company reported a 10% year-over-year decline in net sales for the first quarter. Meanwhile, the company’s net loss improved by 62%.
In an SEC filing, GameStop further added this “We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our stockholders.”
Cohen was revealed as GameStop's largest shareholder when he disclosed a 10% stake in the retailer in 2020. GameStop went on to become a leading name in the meme stock rise of 2021.
Sorel president steps down
Mark Nenow is stepping down as president of the Sorel brand in order to focus on his health.
After rising to the role in 2015, Nenow spearheaded a transformation of Columbia Sportswear-owned Sorel from a men’s workwear brand to a fashion-focused brand that led with a women’s offering of boots, sandals and sneakers.
“Mark led the brand to sales of $347 million in net sales in 2022,” said Columbia Sportswear CEO Tim Boyle, in a statement. “His leadership has been invaluable to this company, and we wish him the very best.”
Columbia will conduct a search for Nenow’s replacement. Craig Zanon, the company’s SVP of emerging brands, will lead Sorel in the interim.
Beautycounter appoints interim CEO
Beautycounter appointed board member Mindy Mackenzie as interim CEO, succeeding Marc Rey. According to the brand, Rey and the board “mutually decided to transition to a new phase of leadership for Beautycounter.”
McKenzie, a former executive at Carlyle, McKinsey and Jim Beam, will lead the company as it conducts a search for a permanent CEO. Additionally, former Natura & Co CEO Roberto Marques will join Beautycounter’s board as chair.
As part of the transition, Nicole Malozi is also joining the company as chief financial officer. She brings experience from Tatcha, Nike, and DFS Group Limited.
Amazon’s North America fulfillment chief departs
Melissa Nick, a VP of customer fulfillment for North America at Amazon, will leave the company, effective June 16, CNBC reported. Nick joined the company in 2014, and oversaw a region that included nearly 300 fulfillment centers. After doubling its supply chain footprint during the pandemic, Amazon recently reorganized its fulfillment operations to take a regional approach, as opposed to a national model that often resulted in items shipping across the country.
Wayfair’s chief commercial officer to retire
Jon Blotner (Courtesy photo)
Steve Oblak will retire from the role of chief commercial officer at home goods marketplace Wayfair. With the move, Jon Blotner will be promoted to chief commercial officer.
"Steve has served as a critical part of our leadership team and played a pivotal role in Wayfair's growth, helping us grow from a $250 million business when he joined to $12 billion in net revenue today,” said Wayfair CEO Niraj Shah, in a statement. “He oversaw countless milestones, from helping to launch the Wayfair brand as we brought together hundreds of sites into a single platform, to launching new categories, business lines, and geographies while overseeing our North American and European businesses, to leading our debut into physical retail.”
Blotner previously oversaw exclusive and specialty retail brands, as well as digital media at Wayfair. Before joining the company, he served as president of Gemvara.com prior to its 2016 acquisition by Berkshire Hathaway.
Lovesac announces CFO transition
Furniture retailer Lovesac said Donna Dellomo will retire as EVP and CFO, and move to an advisory role, effective June 30. Dellomo was with Lovesac for six years.
Keith Siegner was appointed as the next EVP and CFO. He brings experience as CFO of esports company Vindex, as well as executive roles at Yum! Brands, UBS Securities and Credit Suisse.
Additionally, Jack Krause will retire from the role of chief strategy officer, effective June 30. His responsibilities will be divided between CEO Shawn Nelson and president Mary Fox.
“Since joining Lovesac, Jack has played an instrumental role in transforming the Company into a true omni channel retailer by helping expand our physical touchpoints and digital platform as we continue to disrupt the industry,” said Nelson, in a statement.
NRF adds board members
The National Retail Federation announced the addition of five new board members. They include:
- Marguerite Adzick, founder and CEO, Addison Bay
- Harley Finkelstein, president, Shopify
- Ian Kahn, partner, PwC
- Sharon Leite, CEO, Ideal Image
- Carrie Tharp, VP, strategic industries, Google Cloud