Dive Brief:
- DTC mattress brand Purple on Monday announced Joseph Megibow is stepping down as CEO and board member. Succeeding him as acting CEO is Robert DeMartini, effective immediately.
- DeMartini joins Purple from USA Cycling where he served as CEO. Prior to that, he held roles at New Balance, as its president and CEO, and P&G, according to a company press release.
- Purple also revised its outlook for 2021, now expecting net revenue and adjusted EBITDA to be on the lower end of its previously projected guidance of net revenue between $720 million and $740 million, and adjusted EBITDA between $15 million and $25 million.
Dive Insight:
Following a quarter the former CEO called "disappointing," Purple has brought in a new face to lead the company.
"The Board is confident this leadership transition will help sharpen our execution and advance the business toward the long-term financial targets we established earlier this year," Paul Zepf, Purple's non-executive chairman of the board, said in a statement. "With his track record leading New Balance's high-performance growth and rise to a top global athletic brand, Rob is a great addition to the organization and the ideal person to lead Purple."
In its most recent quarter, the DTC mattress brand reported net revenue fell 8.7% year over year to $170.8 million driven by production issues that hampered its ability to manufacture and deliver goods in the second and third quarters. Compared to 2019, net revenue increased 45.5%. Wholesale revenue increased 9.6%, while DTC revenue decreased 15.9% from last year.
Purple, which benefited at the onset of the pandemic from selling in a category in high demand, swung to an operating loss of $6.6 million from a profit of $24.3 million last year. However, the brand also reported a net income of $2.1 million compared to a net loss of $87.2 million last year.
The brand this year has filled other roles in its C-suite. In June, Patrice Varni — who joined with experience from Levi's, The Walt Disney Company, Tempur Sealy Brands and Arhaus Furniture — stepped into the chief marketing and digital officer position.
