Dive Brief:
- In an effort to cut costs, online pet retail Bark on Thursday announced it is laying off 126 employees, representing about 12% of its full-time workforce.
- The company is also reducing its use of certain third-party vendors, consultants and other contractors, according to a company press release.
- Bark expects the cost-saving initiative to result in around $12 million of annual cost saving. For the fourth quarter, the retailer is projecting a $2 million charge from cash severance payments.
Dive Insight:
Bark marks another retailer turning to layoffs in an effort to cut costs.
Bark, like other retailers operating in the pet sector, experienced a boost at the onset of the pandemic as more consumers adopted pets.
In order to meet demand, the company quickly scaled its infrastructure, headcount and other resources, according to CEO Matt Meeker.
“In hindsight, we scaled our cost structure too quickly, which led to operational inefficiencies and unfortunately redundancies,” Meeker said on a call with analysts Thursday. “This reality became even more evident as the broader macro backdrop became increasingly volatile.”
The layoff announcement came as the retailer reported third-quarter earnings. Bark’s Q3 revenue fell 5% to $134.3 million, while DTC revenue grew 1.7% to $120.1 million. Wholesale revenue decreased to $14.3 million from $22.7 million in the year-ago period. The retailer’s net loss widened to $21.3 million from $13.2 million last year.
While wholesale revenue fell year over year, Meeker sees opportunities to expand in that channel.
“This is a segment I’m very bullish on and see a significant opportunity to grow this business long-term,” Meeker said. “Today, we are partnering with virtually every major retailer in the U.S. Our footprint spans 40,000 plus stores across the country, which enables us to reach new demographics and introduce millions of prospective customers to Bark.”
Bark currently sells its toys at retailers, but Meeker hopes to expand that to see its full product assortment, including treats, food and dental products within those stores.
