New Economic Realities   //   March 22, 2024

‘Radio silent’: Former Outdoor Voices workers express frustration over layoffs & store closures

Former Outdoor Voices employees are frustrated over the way the company has managed its layoffs and store closures.

On March 12, Puck’s Linesheet newsletter reported that all 16 of the company’s stores would close by Sunday, March 17.

The internal Slack message read: “Outdoor Voices is embarking on a new chapter as we transition to an exclusively online business.” And, according to Linesheet’s report, “the majority of the Austin-based activewear label’s corporate staff was fired,” which left about 10 people on board mostly working on the operations side. A former store manager estimated to Modern Retail that more than 100 have been let go in total, both on the retail and the corporate side. The company is also reportedly preparing to file for an ABC, Assignment for the Benefit of Creditors, a speedier alternative to bankruptcy that allows a business to transfer assets to a third-party trust that’s responsible for selling off the assets.

According to laid-off store employees who spoke to Modern Retail, the decision to ditch physical retail came as a shock — some stores were still hiring associates and planning events as recently as a couple of weeks ago. They were angered by the way layoffs were handled via Slack, as well as Merrill’s lack of comment on the matter. Further posts on social media platforms like Reddit and Instagram indicate that many of the retail employees continue to be frustrated by the way the downsizing was handled, with some stores putting up posters in their windows, explaining the situation to customers and including the Venmo handles of laid-off employees.

Merrill did not reply to a request for comment from Modern Retail.

It was just the latest piece of internal turmoil at Outdoor Voices that has made its way into the public domain. The once-hot direct-to-consumer startup has gone through a series of leadership changes over the past four years. At the beginning of 2020, founder Ty Haney was ousted as CEO amid reports that Outdoor Voices was losing money and struggling to raise new funding. Then, serial entrepreneur and investor Ashley Merrill invested in the brand and became its chairwoman. Merrill installed a new CEO, former Urban Outfitters President Gabrielle Conforti, who departed last year, according to Puck. Since then, Merrill has reportedly been running the brand.

Over the years, the company raised a total of about $64.4 million in VC money, and in January 2021 Merrill said the company was starting to post a string of profitable months.

Outdoor Voices was founded in 2013 and began opening stores as early as 2014. Some of the now-closed locations include Austin, Denver, Charlotte, New York, Houston and Dallas. Just last year, the company opened four new stores within the span of a few months, in Atlanta, Miami, San Diego and Scottsdale, Ariz. The rapid expansion was one of the reasons the abrupt closures came as a surprise for the laid-off employees. 

One former store supervisor, who was impacted by the layoffs and wished to remain anonymous, said things seemed to be going in the right direction after Merrill took over and restructured the company.

For the past several months, she said, her team was consistently told “things were fine” and business was moving along as usual. For example, the brand’s new Jog Collection was due to arrive in a few days. There were even events being planned and new people being hired as late as last week, she said. There are still LinkedIn listings for OV store jobs up and the company was still promoting its stores-based jogging club in early March.

“There was nothing to suggest that we were all about to lose our jobs,” she said.

The former store employees who spoke to Modern Retail said they viewed themselves as ambassadors and fans of the brand, as they interacted with customers on the ground. 

“The company was already in hot water when I got started nearly a year ago,” another former store manager said — but noted that the brand had survived past issues like Haney’s departure. Despite this former employee’s hesitations, the former store manager took a job at Outdoor Voices about a year ago, due to being laid off at a previous job.

And, in the first few months, things seemed to be going well. “Here I am running a seven-figure location and focusing on getting the store back to profitability since retail is struggling everywhere due to the economy, and three months all this happens,” the former store manager said.

The first sign of trouble was some unexpected store closings about a month ago. While every location had closed by March 17, there were sightings back in February of some stores suddenly closing in cities like Nashville and Denver. According to calls from corporate with store managers, a number of stores had been behind on rent.

Employees were disappointed by how the layoffs were handled. The former manager said the termination process was conducted by an HR representative from Lunya, Merrill’s other company, and was all done virtually.

“Many of us are incredibly frustrated with her decision, especially with her being completely radio silent,” they said. Merrill has not commented or addressed the matter publicly, “and has instead chosen to turn off all comments on the OV Instagram, her personal Instagram and her sleepwear line Lunya.”

The former manager added that one thing that has been missing from the discussion on social media and press coverage is how the layoffs have not only impacted retail workers — the people whom customers interact with the most — but also corporate employees. “It’s not just the stores [closing], it’s practically everyone other than IT and maybe a few designers,” the former manager said.

As for the future of the company, the former store supervisor said, “the ownership has always been tumultuous.” There was optimism that Merrill was coming on with capital behind her. But now, many employees have been pointing the finger at Merrill, noting that her other company, sleepwear brand Lunya, filed for Chapter 11 bankruptcy last year.

A third laid off employee said, “we had just hired people and hosted a 300-plus person event, so it was very out of the blue.” He added that he isn’t as impacted by the layoffs because he has another source of income outside of the Outdoor Voices job. But, he said, the same can’t be said for “some of the great people I worked with — this was their life and they got it ripped away from them.” 

Ultimately, this employee decided not to come in for his last shift as he didn’t want to “give more of my time to the company,” pointing to the lack of severance from Outdoor Voices, as well as the impersonal communication.

“I supported the brand so much and was all for Outdoor Voices, and all that changed so quickly,” he said.