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Experiential Retailer b8ta Furloughs Workforce, Cuts Corporate Staff Due to Coronavirus

by Michael Wolf
March 26, 2020March 26, 2020Filed under:
  • Coronavirus
  • News
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With the exception of grocery, the COVID-19 crisis has hit every retail sector hard as consumers cut back and, in many cases, are forced to stay in due to mandatory shelter-in-place orders.

One of the early casualties of the tsunami is b8ta. The experiential retailer announced this week it would furlough its entire retail workforce and cut its corporate staff in an attempt to weather the storm brought on by coronavirus. The moves, announced in a letter to employees by company CEO Vibhu Norby, were effective last Friday.

In his letter, Norby said furloughed store employees would get paid through March 28 and receive a $1,000 relief checks (part-time employees get $500). Norby also said those corporate employees not laid off would get mandatory pay cuts.

The company’s business consists of both its own flagship retail stores (approximately 25 at the end of 2019) as well as its “retail-as-a-service” platform that powers experiential retail experiences for other retailers such as Macy’s (an investor) and the relaunched Toys R Us.

I’ve always been intrigued by b8ta’s take on retail, which utilizes a model that essentially rents space to product companies (similar to a consignment model) and provides brands granular data about retail customer interactions with their products. Products are often kitchen or food related, such as the Aveine wine aerator or the Hurom slow juicer, and companies such as Thermomix have sometimes used b8ta storefronts as a way to showcase product features and get user feedback.

Norby indicated that b8ta hopes to reopen stores in coming months and welcome back retail employees. The company raised $50 million in funding late last year, so it would appear they have enough of a war chest to weather the coronavirus storm. It’s kinda of a bummer they couldn’t use some of that cash to continue paying its employees past March 28, but it appears the company’s focus is on ensuring its long-term survival by slowing its burn rate through the crisis.

Beyond payroll, the company no doubt has to continue rent payments in upscale retail locations in places such as New York City, San Francisco and Seattle. As well, many of the products sold at b8ta’s own stores are higher-priced, discretionary products, so the company is likely forecasting decreased demand well into 2021 as most consumers deal with financial uncertainty due to the economic fallout from COVID-19.

In a piece of related news, company President and cofounder Phillip Raub announced he would step away from a full-time role at b8ta. He hinted that he has something new he is working on and would share details soon.


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