Even though e-commerce is a kind of COVID-19 bright spot — or at least not as worrisome as the nearly complete brick-and-mortar shutdown — the living ain’t easy online, which still relies on people to run the logistics piece of the business.
The San Francisco-based company said the gross merchandise volume was up 15 percent to about $258 million for the first-quarter ended March 31, but that included a big falloff at the end of the period.
GMV had been trending up over 30 percent year-over-year until the second week of March, when it fell to growth of 12 percent.
But since Bay Area shelter-in-place directives slowed the firm’s warehouse operations on March 17, GMV has fallen 40 to 45 percent year-over-year.
That has net losses ranging from $38.9 million to $39.9 million for the quarter.
But the firm was quick to say it is well capitalized and adjusting operations.
Matt Gustke, chief financial officer, said: “This unprecedented crisis has significantly impacted our ability to operate at previously planned levels, stemming primarily from limited warehouse operations. In response, we undertook a comprehensive review of our operations, including stress test scenarios. We took decisive action to reduce operating expenses and maximize liquidity. With these actions and approximately $303 million of cash, cash equivalents and short-term investments on the balance sheet at the end of March, we believe we are well positioned to rebound strongly and fuel growth once the economy stabilizes, and we believe we are sufficiently capitalized to reach profitability.”
The company is cutting headcount by 10 percent, on top of furloughing another 15 percent of its workforce. It also renegotiated vendor contracts, deferred expense payments and postponed the opening of its Chicago store.
That is cutting operating expenses by more than $70 million this year and reducing capital expenditures by about $15 million.
“We were off to a strong start in Q1, on track to meet or exceed our Q1 guidance,” said Julie Wainwright, chief executive officer. “As the world changed with the spread of COVID-19, we were impacted by the new reality emerging from shelter-in-place and social distancing mandates. We’ve worked to adapt our business, ensuring the safety of our team members, consignors and customers by following the guidelines provided by public health organizations as well as government officials. We continue to work to identify additional ways to improve on these measures.”