Wayfair lost 5 million customers and $1.3 billion last year

wayfair Inc.

W -27.95%

lost 5 million customers by 2022, reducing the online furniture retailer’s buyers to near its size before the Covid-19 pandemic triggered a surge in consumer spending.

The Boston-based company’s revenue fell 4.6% from a year ago to $3.1 billion in the last three months of last year, for a net loss of $351 million.

Wayfair is trying to offset significant losses as consumers increase spending on food and services and move away from electronics and household items.

Executives said the company ended the year with 22.1 million active customers, defined as someone who placed an order in the past 12 months. That was a 19% drop from last year and just above the 21.1 million Wayfair customers at the end of March 2020.

Shares of Wayfair fell about 25% Thursday morning.

Wayfair laid off about 1,750 employees in January, or 10% of its global workforce. The layoffs followed about 870 layoffs in August. Both rounds of layoffs were part of a broader program to find $1.4 billion in annual cost savings.

The company’s co-founders, Niraj Shah and Steve Conine, said in a letter to investors on Thursday that they want to “get back to our roots as a frugal organization.”

Wayfair’s sales surged early in the Covid-19 pandemic as people spent money on home furnishings, helping the company turn profitable in 2020.

Revenue declined in 2021 and through 2022. The company’s annual revenue last year of $12.2 billion was nearly 11% lower than the prior year for a net loss of $1.3 billion.

Wayfair executives said during an earnings call on Thursday that they saw positive signs for an increase in orders and a move to profitability in 2023. “I think we will see the numbers moving in the direction that we want them to grow,” the company said. lord shah.

Wayfair has placed great emphasis on its internal logistics operations providing shipping, customs, warehousing and delivery services to thousands of suppliers. Wayfair executives have compared their logistics offerings, housed under the CastleGate brand, to retail giants such as Amazon.com Inc.

The founders said in Thursday’s letter to investors that they expected CastleGate usage to increase this year after previously declining during the pandemic.

Write to Paul Berger at paul.berger@wsj.com

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