Direct-to-consumer (DTC) retailer Brandless, which sold beauty products, non-GMO snacks and everyday items under its own non-brand austere label in a radical departure from the norm, is halting operations.
“After more than two amazing years of bringing customers across the country better for you and better for the planet products, Brandless is halting operations,” a notice on the website said. “While the Brandless team set a new bar for the types of products consumers deserve and at prices they expect, the fiercely competitive direct-to-consumer market has proven unsustainable for our current business model.”
According to CNBC, Brandless is laying off 70 employees and retaining 10 to fulfill remaining orders, which stopped being accepted Monday. Protocol first reported Brandless’ plans to shut down.
Launched in 2017 by Ido Leffler and Tina Sharkey, the San Francisco-based company built its DTC business model on selling “better for you” products at discount prices — $3 each or groups of three products for $3 — positioning the non-brand brands to compete with retailers like Walmart, Target and Amazon.
That strategy evolved with the opening of pop-up stores in Los Angeles and New York in 2018. Last fall, Brandless announced plans to sell its products in thousands of brick-and-mortar stores, including national retailers. “Our consumers have told us that they want us to be relevant where they are and where they shop,” John Rittenhouse, Brandless CEO at the time, told Business Insider.
“Brandless set a new standard in the wellness and sustainable products industry, and while we weren’t able to compete competitively in today’s DTC market, I’m confident the next great brands of tomorrow will be built from this experience,” current Brandless CEO Evan Price said in a statement to CNBC and other media.
The company’s board said in a statement cited by Ad Age that “the direct-to-consumer market is fiercely competitive and ultimately proved unsustainable for their business model.” Ad Age gave Brandless its Startup of the Year award in 2018.
Bloomberg reported that Brandless ceasing operations comes two years after the Softbank Vision Fund committed to investing $240 million. Softbank is struggling with other investments, Bloomberg said, including Uber and WeWork.
Softbank quarterly profits were set to drop sharply, Reuters said, amid growing pressure from hedge fund Elliott Management, which has increased its position in Softbank.