Wayfair Inc. W -28.06% lost 5 million customers in 2022, shrinking the online furniture retailer’s buyer base to nearly its size before the Covid-19 pandemic sparked a surge in consumer spending.
Revenue for the Boston-based company fell 4.6% year over year to $3.1 billion for the trailing three months of last year, for a net loss of $351 million.
Wayfair is trying to stem significant losses as consumers spend more on groceries and services and turn away from electronics and household goods.
Executives said the company ended the year with 22.1 million active customers, defined as someone who placed an order in the last 12 months. That was down 19% year over year and just above the 21.1 million Wayfair customers at the end of March 2020.
Wayfair shares fell about 25% Thursday morning.
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Wayfair laid off about 1,750 workers, or 10% of its global workforce, in January. The layoffs were followed by about 870 job cuts in August. Both rounds of layoffs were part of a broader program to seek $1.4 billion in annual cost savings.
The company’s co-founders, Niraj Shah and Steve Conine, said in a letter to investors on Thursday that they want to “return to our roots as a frugal company.”
Wayfair’s sales soared early in the Covid-19 pandemic as people splurged on home furnishings, helping the company achieve profitability in 2020.
Sales declined in 2021 and into 2022. The company’s annual revenue of $12.2 billion last year was down nearly 11% year over year for a net loss of $1.3 billion.
Wayfair executives said in an earnings call on Thursday they see positive signs of picking up orders and moving towards profitability in 2023. “I think we’re going to see the numbers go in the direction we’re growing them want to see,” said Mr Shah.
Wayfair has placed great emphasis on its internal logistics operations, providing ocean transportation, customs, warehousing and delivery services to thousands of suppliers. Wayfair executives have compared their logistics offerings, housed under the CastleGate brand, to retail giants like Amazon.com Inc.
The founders said in Thursday’s letter to investors that they expect CastleGate’s usage to increase this year after declining early in the pandemic.
Write to Paul Berger at [email protected]
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