StockX will lay off 8% of its workforce, the sneaker marketplace confirmed on Tuesday. Those impacted will receive severance packages and health benefits for an unspecified period.
In an emailed statement, StockX cited “macroeconomic challenges currently impacting our global economy continue to affect consumer behavior” and the need “to adapt and pivot to deliver the highest level of service to the millions of customers we serve around the world.”
However, the company remains in growth mode. “StockX is not immune to these challenges, and while our business continues to grow, the current climate calls for us to make adjustments,” the company said. “As a result, we made the difficult but prudent decision to reduce our workforce.”
StockX is faltering against some tough trends this year, with late-pandemic footwear sales down, inflation up and authenticity proving tricky for any resale site guaranteeing genuine articles.
The footwear industry last year enjoyed what NPD Group in an April report called “stimulus-fueled comps.” Up against those comparisons, U.S. footwear sales fell 3%. With average prices up 11%, unit sales were actually down 12% in the U.S. Since 2019, revenue rose 3% and unit sales fell 10%, NPD found.
As StockX has found, “macro pressures on the consumer combined with tough comparisons from 2021 will likely curb growth,” NPD researchers Matt Powell and Beth Goldstein said in their report.
StockX, which trades mostly in resale, also must contend with what the NPD analysts said could be “the beginnings of a seismic shift in the industry,” as new brands, styles and tech enter the market.
Adding to its woes, the company is facing Nike in federal court over what the sports giant claims are counterfeit shoes and NFTs that violate its intellectual property rights. Authentication, which StockX guarantees on every purchase, per its website, has been a sticking point for marketplaces. StockX has itself defended its process in a statement on its court battle with Nike, saying that the brand’s own executives shop the marketplace and that its brand protection team had expressed confidence in the StockX’s authentication system.
But StockX joins TheRealReal and other resale marketplaces in being confronted by brands that say fakes are getting past them. E-commerce in general has led to the proliferation of counterfeit sales, frustrating law enforcement, trade officials, brands and e-retailers. The promise of authenticity only raises the stakes.
For now, the company is reducing its labor force in an effort to ride out an economic phase that is souring consumer confidence and eating into discretionary spending.
“Parting with team members is never easy, particularly when those team members are people who are passionate about their work and committed to delivering on our brand promise each and every day,” the company said. “However, effectively navigating today’s reality requires investment in long-term sustainability. We are grateful for the contributions of those impacted and are working to ensure they are supported in this time of transition.”