22. November 2013–
Rocket Internet's cosmetics subscription box service Glossybox is cutting back, particularly its international branches. A "couple of dozen people" have had to leave the company, including staff in its Berlin headquarters. Cofounder Brigitte Wittekind has also parted ways with Glossybox – she'll be working in another Rocket Internet portfolio company. Not long ago, Glossybox employed a total of 250 staff.
The company's Brazilian website is already down and the service will not run in Italy and Poland for much longer – the management team is still deciding whether the Spanish and Dutch services will continue, Glossybox founder Charles von Abercron (below) said.
"Neither highly profitable nor in deficit"
Around €55m has been invested in Glossybox to date, some of the money tied to the condition of reaching key performance indicators. Rocket's main financier, Swedish AB Kinnevik, is among the investors.
Von Abercron told us there's still enough money in the bank. And in its core countries, Glossybox is apparently still thriving. The company is "neither highly profitable, nor in deficit" in its economic core. New hires – including American Taylor Barringer, who is well acquainted with the industry, will work to build customer loyalty along with new creative director Henrik Siemers – mean von Abercron is hopeful for the future. In addition to German and Austria, Glossybox will also be targeting Sweden, Norway, France, Great Britain, the US, Korea, China and Japan.
Glossybox, which has sold four million boxes to date, has made some changes in the past – discontinuing its subscription box for young mothers, designing one-time boxes, attempting to sell multiple country branches to cosmetics firms and building a central hub to save costs. Of course, it's part of the nature of startups that not everything always works out as planned.
"We've temporarily lost our spice"
Two years and nine months after launching, it "became clear that, due to quick growth, not everything went as planned", the founder said (quotes translated from German). "We've temporarily lost our spice and now we're returning to it."
Naturally, it was speculated that Glossybox – a Birchbox copycat – would eventually be bought out by the US-based original. After this failed to happen, the company is now facing a difficult transition from startup to a young company.
"Glossybox is something that no one desperately needs," founder von Abercron said. "But we do it so well that everyone desperately wants it." The market is no easy one, though. Providers need to establish good relationships with the cosmetics industry – after all, they need to make sure the relevant testers are always available. That didn't always work in the past, Glossybox was forced to offer €3 vouchers in exchange for unfilled boxes.
On the other hand, you also have to be super quick in new markets: "As the first mover, you have a large advantage, copies of businesses that already exist are not as well received," von Abercron said. That's why the company focused on expanding from the get-go, it grew quickly, was decentralised and consciously accepted that the quality could be lacking. The catch: because the subscriptions could be cancelled monthly, unhappy customers quickly disappear.
Another factor contributing to the current situation, von Abercron admitted, was also "a lack of thoroughness when hiring", resulting in badly conceptualised jobs. That's why, despite the lay-offs, the company now needs new know-how. Von Abercron particularly wants to strengthen the company's second level of management – if all goes to plan, he sees a brighter future for Glossybox.
Translated by Michelle Kuepper