Birchbox Canada - Suspending Canadian Operations
I have some sad beauty box news to report. Bloomberg News is reporting that Birchbox is laying off staff and suspending Canadian operations in a bid to "reinvest in [their] biggest opportunities and grow even more quickly in the future". Reading between the lines, I take that to mean the Canadian venture is not profitable enough for the small company.
Birchbox Inc., a startup that sells subscriptions for personalized beauty samples, said it’s cutting 15 percent of staff and suspending operations in Canada. The cutbacks, which affect 45 people out of a staff of 300, are the latest sign that technology startups are struggling to create sustainable businesses as venture funding begins to cool.
The article gives no other information about the Canadian closure, but does quote co-founder and CEO Katia Beauchamp saying "today’s market demands that we reach profitability this year". The article also mentions that Birchbox is expecting to double its shop sales, and subscription sales are growing - likely just not in Canada.
The situation was first reported by tech news site PandoDaily on January 29th. Unfortunately, one has to be a member of the site to read the full article, but it does quote Beauchamp saying "It’s 100% the right decision for the company".
What does this mean for current subscribers?
I have no idea.
Birchbox has not reached out to subscribers, or affiliates. I am currently on my 3rd month of a one year pre-paid subscription. This is the second year of my paid subscription. I am also a part of their affiliate network, and as an affiliate, I am supposed to receive "exclusive access to new launches, brand news and exciting offers". I received no news from Birchbox about the Canadian situation, either as a subscriber, or as an affiliate. Instead, Birchbox spoke to a media outlet and shared the news about their "incredibly difficult decision".
As an affiliate, I'm disheartened. I just posted a review last week, and as recently as Thursday was promoting Birchbox CA to my own very close friends. I was a true supporter of this company. While they did struggle with the launch of the Canadian site in late 2014, the last few months seemed promising, with new brands added to the shop and and features added to the subscription side. Things looked good!
As a paid subscriber, I'm mad. It's pretty crappy to find out in the news that your subscription is ending. It was a really poor decision on Birchbox's part to share the news with media prior to communicating with subscribers. Now we are left wondering when the subscriptions will end, how/when/if we will get refunds for unused portions of our subscriptions, and what happens to our Birchbox points. There are many unanswered questions right now. I am incredibly sorry to anyone that signed up through my referral links recently. I'm as in the dark as you are right now.
I reached out to Birchbox on Twitter and received this reply:
Hi there, I am so sorry that you had to hear this regrettable news from the media and not us directly. I will have an announcement shortly for our Canadian members and we'll be sharing the resolution with you and our other affiliates asap.
In the meantime, we wait... And maybe go wild in the Birchbox CA shop before it's too late to spend those hard earned points.
I will update more as soon as I know.
Update: Check here to see an update on the current situation.
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