Birchbox backs away from expansion plan

Birchbox is reportedly backing away from its expansion plan as the young company is forced to focus first on profitability before growth.

Birchbox had planned to open at least two more stores in 2016, with one dedicated to men's products, but the company has now paused physical expansion in the United States and international markets, according to The Wall Street Journal. It has also reduced staff and office space at its New York City headquarters.

Efforts to raise capital have also fallen flat, and the company's last round of investment was more than two years ago when it raised roughly $60 million. 

"There is a complete reversal," co-founder and CEO Katia Beauchamp told The Wall Street Journal. "It is all about showing how you can operate this business profitably and it has forced us to completely change the way we operate, the way we spend money."

Birchbox pioneered the monthly subscription service for beauty products – shoppers receive a box of samples each month for a $10 fee. It quickly expanded to sell full-size products and opened a store in New York's SoHo neighborhood in 2014.

But the number of subscription services – and online retailers opening storefronts – has grown substantially, with many retailers including Sephora offering a similar product.

For more:
- see this Wall Street Journal story (tiered subscription)

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