According tomedia reports, companies around the world have been affected by the COVID-19 pandemic. Away, the New York-based fashion travel brand that has been in its five years of existence, has raised about $180m from investors over the years, including $100m in a round of a-round financing last year, valuing the company at $1.4bn – almost three times its valuation a year ago.
Tourism has been hit hard by the spread of the new coronavirus in the United States and around the world. Away founders Steph Korey and Jen Rubio said in a new Media post that the company’s product sales have hit rock bottom. Specifically, they revealed on Tuesday that sales of their suitcases, suitcases and internal groomers had fallen by more than 90 per cent in the past few weeks.
The company, which started out as a direct-selling brand, first closed 10 retail stores to reduce the “burn rate” and “we want to pay its retail team during the short-term closure”.
Not surprisingly, given that human capital is often the company’s biggest cost center, the strategy has not gone far enough, forcing the company to take unpaid leave and lay off 10 per cent of its employees.”
“It was a devastating decision and we thought about it as a last resort. Comey and Rubio said in the post. “We used to be proud of the opportunities that people created, and now the pride we used to be has turned into fear, frustration, and fear for so many people who don’t deserve it.” Many of these people are people we hire ourselves, and they are more friends. “
The founders added that they had also offered to suspend pay, saying that senior company leaders had agreed to a pay cut. Comey and Rubio said those laid off will receive at least eight weeks’ severance pay and will see their health insurance until the end of June. They also point out that, thanks to government assistance, its laid-off employees, many of whom work in customer support, should continue to receive 100 per cent of their wages and benefits until they can return to full-time work.
Late last year, some former employees described Away as having a “toxic” culture in The Verge, in part because of CEO Korey’s management style. Shortly after, Comey apologized and left. But a few weeks later, she announced through The New York Times that, after much consideration, she had no plans to give up her role at the company, which she currently shares with Stuart Haselden. When Korey first left, he agreed to join the company from Lululemon Athletica.
Whether the two continue to share the role is another question, presumably how long the current downturn will last. In the meantime, Away did everything it could to do everything it could for employees who could no longer pay.
Of course, Awa is not the first company to do so. Last week, Mariam Naficy, CEO of Minted, a personalized stationery start-up, also posted a letter to her employees about the company’s layoffs and the severance compensation that former employees can expect. It is easy to imagine that many other companies will do the same with current developments.