Jessica Alba’s Honest Co. is cutting staff and reorganizing operations to take on more of an omnichannel positioning, capitalizing on its digital momentum with a broader push into wholesale and other growth areas.
Brian Lee, a co-founder and chief executive officer, told WWD the company would eliminate about 80 positions in the first quarter, just over 14 percent of its 552 employees.
“We’re really positioning the company for continued growth and success and really driving the company toward an omnichannel strategy,” Lee said. “We started off as an e-commerce business and quickly evolved into some offline channels as well. As we look toward the future, we’re building a foundation that will help in 2017 and beyond.”
Most of the job cuts will come as a Texas call center is automated, but the highest-profile departure will be David Parker, chief financial officer and chief operating officer. Cofounder Sean Kane, who was president and focused on a number of areas of the business, including digital, customer service, sales and marketing, is also stepping back but is going to stay on as an adviser as he starts a new company.
“We have plenty of capital in the bank, it’s really not about cost savings,” said Lee, noting that Honest, while maintaining its digital business, will be channeling more resources to branding, product development and offline sales.
The brand is sold through Target, Costco, Whole Foods and other retailers and will be looking for more real-world outlets where it can connect directly with customers.
Financial sources have been buzzing about Honest for months as the company explored an initial public offering or a sale with the help of Morgan Stanley and Goldman, Sachs & Co. Several of the big consumer products companies, including Johnson & Johnson and Unilever, have been said to take an interest in the brand, although Unilever bought Seventh Generation in October.
Lee said that the broader process did not play into any of the changes Honest is putting into place.
“We’re really focused on our long-term plan as a standalone business,” the ceo said. “We’re still growing at double digits, having great quarter-over-quarter growth. Things are looking good.”
He said Honest wanted to bring in more consumer products growth experience and was looking at growing beauty, international and more.
“As we’re moving forward, we’re going to start more brand campaigns, really elevating what Honest really stands for, really share our vision, our mission,” Lee said.
The five-year-old company was founded by Alba, Christopher Gavigan, Kane and Lee and seeks to deliver, as its web site says, “savvy style, sustainability and extraordinary service and convenience all wrapped in a passion for social goodness, tied with a bow of integrity.”
Honest has grown quickly and is said to have sales of about $300 million as it now pivots to expand its business.
About 50 of the job losses will come as the Texas call center is shuttered and replaced with an automated system that helps customers manage their subscriptions for the brand’s products.
Another 15 or so jobs will be lost as the company closes its San Francisco office, which was acquired along with the app development company Alt12, parts of which have already been integrated into the business. And about 15 people will lose their jobs at the company’s Santa Monica headquarters.