You might wonder why I’m drawing your attention to a Jezebel article about Nasty Gal but I promise you it is a more than a little bit relevant. I wrote a post last week after the Q1 earnings call talking about certain reorganization that is going on at Lululemon behind the scenes (here) and how there is a major shift to not only ‘cut the fat’ but also make it a less ‘elitist’ working environment and a bit of a morale issue. The overlap in the story is that the former Lululemon Chief Product Officer Sheree Waterson that was fired during pantsgate is now CEO at Nasty Gal and there are some not so flattering descriptions in the article that are reminiscent to a lot of what was going on at Lululemon a while back. Those of you that are ‘OG’ to this blog and lulu addicts blog will recognize a lot of the complaints we had of the product back in 2012 and 2013. Also, be sure to read the comments in the article because there are a few lululemon employee comments.
Excerpt from Jezebel article:
In March 2014, Sheree Waterson was hired. Waterson came from Lululemon, where she was fired in the wake of See-Through Pantsgate, for which she was held personally responsible. In January 2015, Amoruso stepped down as CEO and appointed Waterson in her place. (Amoruso said at the time that she’d continue leading the creative and brand marketing wings of the company, as well as acting as executive chairman of the board.)
The longtime employees say that while Waterson is deeply intelligent, she has little sense of what made Nasty Gal so successful.
“She’s not really listening to the Nasty Gals and what they wanted,” one says, referring to longtime, loyal customers: “the hardcore Nasty Gals that brought us where they are.”
Several former employees say that Waterson’s focus is on raising the Average Unit Retail (AUR), the average cost of an item in the store, even though a cornerstone of the business has always been inexpensive clothing. The AUR at Nasty Gal is now around $100, the former employees say, which is the highest it’s ever been, and up by 50% from this time last year. The sales volume, they say, has plummeted 40% at the same time. Waterson, who is 58, reportedly blamed that on “inexperienced merchants,” but one former employee says the real problem was that she pushed styles she personally liked without paying attention to what actually sold.
The former employees describe nightmarish marathon meetings where Waterson tore down everything about the brand’s current look. One told Jezebel:
Sheree prevented anyone from doing any real work by keeping us in 3-5 hour meetings where she would tear down all the products on the site, which was literally based on nothing but her own 58 year old opinion. Even when people presented her with legit selling data on items she deemed irrelevant, she would brush it off and push the merchants to invest in styles that she personally liked. She would show up late to meetings (or leave after 10 minutes), talk for about an hour about nothing in particular, and then comment about how terrible everything looked.