DTC furniture retailer ‘living beyond our means’ cuts workforce by 17%

VANCOUVER, BC – Article, the direct-to-consumer furniture retailer, has laid off 17% of its employees, citing a downturn in the e-commerce marketplace and an operation size that wasn’t sustainable.

The 216 workers impacted by the staff reduction were informed of the decision late last week. In a letter to employees posted on LinkedIn Friday, co-founder and CEO Aamir Baig said the reduction to Article’s team “is not your fault; this is my fault. “

“Like many e-commerce companies, we benefited tremendously from the demand increase from COVID,” Baig wrote. “We anticipated the trend to online purchasing would be sustained; that did not happen, and it has since returned to pre-COVID trends.

“As a result, our financial projections showed that we were operating the business at a size larger than current demand would sustain. Put simply, we were living beyond our means. I needed to resize the business to restore our position of financial strength. “

Article was started in 2011 by Baig and three other engineers. It began selling furniture under a digital-first model in 2013 and achieved profitability in 2015. Article’s product mix ranges from sofas, chairs and bedrooms to outdoor groupings and décor pieces.

Revenue for its DTC modern furnishings model grew by more than 45% between 2020 and 2021, according to a company release from late March. Furniture Today’s leading e-tailers report for 2021 put Article’s estimated 2020 sales at more than $ 160 million.

Among the other 2021 milestones the company cited in March were the delivery of its 1 millionth order; the opening of new fulfillment centers in Vancouver, Houston and Chicago; the launch of an in-house delivery program in Boston, San Francisco, Austin, Dallas, Denver, Houston, Chicago, Portland, Ore., and Charlotte, NC; and the doubling of its office staff in Vietnam to support manufacturer relationships.

It also added two executives to its team in March: a senior vice president of technology to oversee the 100-plus person technology department and a vice president of logistics to be responsible for 17 fulfillment centers and delivery stations in Canada and the United States.

In his LinkedIn letter, Baig said Article was extending benefits for those who were let go as well as providing severance and resources such as help with resumes and the ability to keep company equipment, including laptops. The letter didn’t specify which areas of the business were impacted by the layoffs.

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