Louisville's Cafepress.com cuts CEO's pay amid continued losses
Facing declining sales and persistent losses, Louisville-based Cafepress.com cut its CEO’s base salary by more than half and laid off 14 corporate employees, the company said in regulatory filing on Tuesday.
LOUISVILLE, Ky. (WDRB) -- Facing declining sales and persistent losses, Louisville-based Cafepress.com cut its CEO’s base salary by more than half and laid off 14 corporate employees, the company said in a regulatory filing on Tuesday.
The online retailer, which sells customizable merchandise like t-shirts and coffee mugs, has been struggling through a multi-year turnaround effort. Its stock has declined about 92 percent since the company went public in 2012.
Cafepress’ sales fell each year from 2014 to 2016 and in each quarter in 2017. The company posted a $3.6 million loss in the quarter ended Sept. 30.
Sales fell again in the last quarter of the year, the all-important holiday period for e-commerce, but the company won’t release figures until Feb. 28.
Fred Durham, Cafepress’ co-founder and CEO, reduced his base salary from $300,000 a year to $125,000 effective Feb. 5, according to the filing.
In an interview, Durham said he also gave up the possibility of getting a bonus, which could have been up to $225,000 depending on performance.
“It just seemed like the right thing to do, to share the pain with the group,” Durham said.
He added that he would “feel like an a-hole” for collecting a bonus while laying off staff.
The company also cut its Louisville headquarters workforce by 14 employees on Jan. 9, according to Cafepress CFO Phil Milliner. Louisville Business First reported the layoffs last month.
Cafepress customizes products and ships them from a warehouse in the Riverport industrial park in southwest Jefferson County. It moved corporate staff of about 120 to a headquarters building in Middletown in 2016.
The cut reduced the company’s total employment, including at its warehouse in Riverport, to about 266.
Durham, who owns about 17 percent of Cafepress’ stock, said better times are ahead as the company rolls out long-awaited changes to the source code and appearance of its website.
Cafepress’ sales declines are primarily the result of changes in search engine algorithms that cut the company’s inbound web traffic by half, Durham said. The new website should help the company become more visible again in searches, he said.
“Most of the loss has really been in one marketing channel … everything else is improving,” Durham said.
Still, amid the sputtering results, the company’s board and managers will “carefully consider all options to enhance stockholder value,” according to the filing.
Durham declined to comment on those options, but said the company would give an update on its strategy on a March 1 conference call.
Asked how long the company can sustain losses, Durham said it’s a “good question” and one he is sure to face on the March 1.
Cafepress hinted at one new line of business in the press release, saying it plans to provide “fulfillment services for other consumer-facing, on demand, custom product providers.”
Durham said bankruptcy is “definitely not” being contemplated as the company has no debt other than what is owed to suppliers and vendors in the normal course of business.