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Email sent: Jun 29, 2020 1:30pm

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Outdoor Voices debuts a new board.
Morning Brew June 29, 2020

Retail Brew

TOGETHER WITH

Klaviyo

Good afternoon. Retail Brew has a new sibling. It’s a...nother newsletter.

Marketing Brew, our latest digest dedicated to the biz of marketing and advertising, will hit inboxes for the first time later today. Keep reading for the sign-up details. 

In today’s edition: 

  • Outdoor Voices’s leadership
  • Gap’s collab fumble
  • Casper in legal trouble

Halie LeSavage

DTC

OV's Old Guard Takes a Hike

Outdoor Voices new chairwoman Ashley Merrill represented by an Outdoor Voices Hat

Francis Scialabba

Four months after founder and former CEO Tyler Haney’s departure, Outdoor Voices’s preferred way of #DoingThings is still leadership musical chairs.

Who’s out: Interim CEO Cliff Moskowitz has vacated the role without a replacement. He follows Mickey Drexler, a J.Crew and Gap veteran, who’s leaving the OV board. 

Who’s in: Ashley Merrill, CEO of sleepwear line Lunya, is now chairwoman of the board. Haney is also returning to the board. 

OV is recalibrating following a cascade of cringey revelations about its spending and company culture that emerged around Haney’s original departure in February. 

  • By 2019, OV was losing up to $2 million per month on annual sales of about $40 million. Those losses stemmed from expensive marketing campaigns and expensive-er merchandising blunders.
  • Former store and corporate employees told BuzzFeed News that Haney’s leadership style cultivated a toxic work environment

So what’s the turnaround plan?

In the finance department…“[OV] was optimized initially for topline ‘growth at all costs,’” Merrill tells Retail Brew. “In this next chapter we will instead focus on business health and mission with clear strategy and leadership leading the way.” I’m guessing that means fewer boutique candles and more products designed for repeat purchases.

In the HR department…Merrill didn’t provide Retail Brew with a roadmap for improving employee relations, but noted that “fostering a culture of continuous learning, development, and transparent communication is a critical part of our growth.” Haney told Vogue that the company will prioritize hiring women and people of color.

Until OV finds a permanent CEO, Merrill will fulfill most operational duties. Her experience scaling Lunya to generate a reported $50 million in annual sales since its 2012 launch should help. 

  • And if there’s a time for a leggings brand to thrive, it’s now: Since the pandemic started, OV has noted bumps in sales and attendance at virtual customer events.

My takeaway: Outdoor Voices has the reinvigorated board and loyal fans it needs to start over. But its long-term success depends on finding (and keeping) a CEO with operational retail experience—and overcoming recent controversies to make good on its ambitious promises.

        

APPAREL

Gap's Had Better Looks

While Twitter proper traded theories about Yeezy Gap on Friday, true fashionphiles had a pointed question about Gap’s portfolio: What about the line Gap had already announced with New York designer Telfar Clemens in January?

It’s no more. Gap confirmed to Business of Fashion that it had indefinitely postponed its Telfar collection. And Gap’s leaving a mess behind. 

  • Sources told BoF that Telfar has not yet been paid for working on the Gap collaboration. Gap is also holding onto initial samples for the collection. 
  • Gap and Telfar reportedly didn’t sign a contract prior to the pandemic, either. But Gap said it’s committed to paying Telfar a cancellation fee.

Disappointed customers and fashion insiders suggested the whole snafu unfairly pitted Kanye West and Clemens against one another

Why not release both? Both designers had expressed deep affinity with Gap’s brand, but Yeezy may seem like a safer bet to the financially strained retailer. Based on the commercial success of Yeezy 1.0, Gap reportedly expects its Yeezy line to generate $1 billion in annual sales at the five-year mark. Other high-low fashion collabs across retail usually sell quickly, but they don’t fetch those numbers.

My takeaway: We know Gap could use West’s star power to make up for its pre- and mid-pandemic losses. But pulling support for an independent designer in the process was a controversy magnet Gap could have avoided.

        

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E-commerce is more important than ever before and businesses that are leveraging their brands to create deeper customer relationships are thriving right now.

At least that’s what Klaviyo’s new Nine By Nine: 81 Brands Changing Our World report finds. Released in partnership with Future Commerce, this report—featuring more than 20 Klaviyo customers—explores which brands are making a difference across nine retail categories. 

Who are the changemakers and why are they so beloved? You’ll have to download the report to find out. 

Get Klaviyo’s report here.

BIZ LAW

Casper Investors Got the Wrong Sleep Number

Casper mattresses stacked over S-1

Francis Scialabba

A new lawsuit against Casper suggests investors were misled about the brand’s financial standing before its February IPO, Bloomberg reports. 

Roll the tape. Weeks before debuting on the New York Stock Exchange, Casper lost its unicorn status. And Casper’s decline to undercorn came with bigger problems, the lawsuit alleges. 

  • Pre-IPO...Casper neither disclosed that its profit margins were thinning nor that it was struggling to sell clearance inventory. 
  • Post-IPO…raising $100 million couldn’t save Casper from reducing headcount and searching for other cost-cutting mechanisms. 

Casper denied the lawsuit’s claims. But it can’t argue the numbers: Its valuation has fallen to $337 million from around $470 million at its IPO. Casper’s plans to become profitable, which included opening new stores and exploring new products, are 1) expensive and 2) challenging during a pandemic. 

My takeaway: IPOs for high-flying unicorns have been a chronic disappointment. With fresh allegations that a prominent brand’s filing wasn’t accurate, investors have even more reason to steer clear of companies with bloated valuations that prioritize growth over profit. 

        

WHAT ELSE IS BREWING

  • Starbucks will halt social media advertising on Facebook, Instagram, and Twitter.
  • Coty will partner with Kim Kardashian to expand her cosmetics empire in a $200 million deal. 
  • L’Oréal will stop using “skin whitening” labels on some products. 
  • Under Armour wants to pull out of its $280 million licensing deal with UCLA.
  • Nike will lay off workers as part of a larger plan to reinvest in e-commerce.

SPONSORED BY WITHIN

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FROM THE CREW

Marketing Brew image

Francis Scialabba

You scrolled all this way. Now meet the newest member of the Brew family, Marketing Brew.

Written by Phoebe Bain, Marketing Brew is a 3x weekly dive into the world of marketing and advertising. It explores everything from ad tech to campaign platforms to brand-speak you can’t stop hearing—because now more than ever, marketing pros need a guide to their industry like only the Brew can provide.

Whether you’re a retail marketer, social media manager, or Super Bowl commercial archivist, you need Marketing Brew in your inbox. Ready to read the first edition? Sign up here.

BUSINESS PROFESSIONAL

tripping into phone with pool

Giphy

“Hey, u up?” never convinced me to change out of my PJs and never convinced shoppers to reunite with an abandoned cart. Here are resources to nail the art of 1) hitting up your customers and 2) increasing purchases via... 

Text. Check out the retail SMS studies on Really Good Texts and you’ll never get left on read. 

Email. I can tell you a strong subject line is the difference between getting more opens and going straight to the Trash. Campaign Monitor can tell you everything else you need to know about becoming an inbox fave.

Call. JK. The only necessary phone calls in life are from family, friends, and GrubHub deliveries. So don’t do this.

SWAPPING SKUS

So long as there’s a retail trend, COVID-19 will accelerate it.

  • In the time of coronavirus, “every restaurant kitchen is now, in one way or another, a ghost kitchen.” What does that mean for the restaurant sector long-term? (The New Yorker).
  • Luxury shopping was still an IRL-only game when upscale fashion site Net-a-Porter launched 20 years ago. Two decades later, it’s clear that luxury e-comm is here to stay—and it could rival in-store shopping for good. (Harper’s Bazaar UK). 

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Written by @halie_lesavage

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