Away Travel, the New York-based luggage brand, has been facing challenges in recent years, prompting questions about its future prospects and whether it is going out of business. The company experienced a significant drop in sales and a negative impact on its operations due to the COVID-19 pandemic, which resulted in a decrease in travel. In April 2020, Away Travel laid off 10% of its staff and furloughed 50% of its team. The pandemic's effect on the company's sales and operations, along with reports of toxic work culture, have raised concerns about its stability. However, Away Travel has been taking steps to recover and adapt to the changing market. They have expanded their physical store locations and shifted their focus to retail expansion, with plans for new store openings in 2023. Additionally, Away Travel has diversified its product offerings beyond suitcases, launching outdoor travel gear and accessories. Despite these efforts, some customers have expressed mixed reviews about the quality of their products and customer service.
Characteristics | Values |
---|---|
Sales | Dropped by 90% due to the pandemic |
Staff | Laid off about 10% of its staff and furloughed about 50% |
Strategic Options | Exploring options including a sale of the company |
Customer Loyalty | Challenging to maintain due to the infrequent need for replacement |
Retail Expansion | Planned a few new store openings |
Product Line | Launched outdoor travel gear, such as backpacks, duffel bags, convertible backpacks, and messenger bags |
What You'll Learn
- Away's sales dropped 90% due to the pandemic's impact on travel
- Away put 50% of its team on furlough and terminated 10% of staff
- Away's revenue in 2020 was $135 million, half of what it made in 2019
- Away's toxic work culture was exposed in a 2019 exposé
- Away's new outdoor gear line, For All Routes (F.A.R.), is a major design departure
Away's sales dropped 90% due to the pandemic's impact on travel
The direct-to-consumer luggage brand Away has experienced a significant decline in sales due to the impact of the COVID-19 pandemic on travel. In April 2020, the company reported a 90% decrease in sales since the start of the pandemic, which led to difficult decisions regarding their workforce.
To mitigate the financial impact, Away made the decision to furlough about 50% of its team and lay off an additional 10%. Those who were laid off received a minimum of eight weeks of severance pay, and the company covered their healthcare benefits through June. In addition, Away waived equity vesting requirements and extended the period for employees to exercise their stock options.
The pandemic-induced travel standstill severely interrupted Away's momentum. Prior to the pandemic, Away had been enjoying a healthy profit margin on every order. However, during the height of the pandemic, the company's salary costs alone exceeded their revenues by a significant margin.
The impact of the pandemic on Away's business was not limited to sales and revenue. In response to the outbreak, Away closed its 10 stores and delayed the opening of a new store in Dallas. The company also froze hiring, suspended the founders' salaries, and reduced senior leadership pay.
Despite the challenges, Away has demonstrated resilience and a commitment to recovery. Since the initial shock of the pandemic, Away has shifted its focus to retail expansion and product assortment expansion. As of April 2023, Away operates 13 retail stores in major cities across the United States, the United Kingdom, and Canada, with plans for additional store openings in 2023. The company has also expanded its product offerings beyond suitcases, launching outdoor travel gear and accessories such as backpacks, compression socks, and travel blankets.
Traveling Abroad with a Newborn: Is it Safe?
You may want to see also
Away put 50% of its team on furlough and terminated 10% of staff
The trendy New York-based travel brand Away has furloughed half its employees and laid off 10% of its staff in April 2020. The company's founders, Steph Korey and Jen Rubio, announced the cuts in a blog post, citing the impact of the COVID-19 pandemic as the primary reason for this decision.
Before the furloughs and layoffs, Away had already taken several steps to reduce costs, including shutting down its 10 retail stores and freezing hiring. However, these measures were not enough to offset the significant decline in sales. Away reported a staggering 90% decrease in sales of its products, including luggage, bags, and interior organizers, due to the pandemic.
In their announcement, Korey and Rubio expressed their devastation about the situation, stating that it was a last resort. They also mentioned that they would be suspending their salaries, and senior leadership had agreed to reduced salaries. The company offered a minimum of eight weeks of severance pay and continued healthcare coverage until the end of June for those affected by the layoffs.
The pandemic's impact on the travel industry has been significant, and Away's situation reflects the challenges faced by many businesses in this sector. The company's decision to furlough half of its team and terminate 10% of its staff highlights the unprecedented challenges it faced during the COVID-19 pandemic.
Despite these challenges, Away has since shifted its focus to retail expansion, planning new store openings and enhancing its omnichannel services. The company has also released new product lines and addressed the challenge of maintaining customer loyalty in the luggage market.
Italian Study Breaks: Travel Destinations
You may want to see also
Away's revenue in 2020 was $135 million, half of what it made in 2019
Away, the New York-based luggage and travel accessories brand, has experienced a turbulent few years, with the COVID-19 pandemic significantly impacting its sales and operations. In April 2020, the company was forced to furlough 50% of its team and terminate another 10% of its staff due to a 90% decrease in sales since the pandemic's onset. This challenging period led to a substantial drop in Away's revenue, with figures from 2020 highlighting a stark contrast to the previous year. Away's revenue in 2020 was $135 million, a significant decrease from the $270 million generated in 2019. This decline can be attributed to the pandemic's detrimental effect on the travel industry, causing a reduction in demand for travel-related products.
The pandemic's impact on Away's business underscores the vulnerability of the travel sector to external shocks. With travel restrictions and health concerns limiting people's mobility, the company faced a steep decline in sales. This disruption also prompted Away to reevaluate its business strategies and adapt to the changing landscape. During this period, the company focused on expanding its retail presence and enhancing its omnichannel services.
Away's response to the pandemic and its efforts to recover from the revenue loss are indicative of its resilience and adaptability. The company's decision to expand its physical store locations and improve its online offerings demonstrate a commitment to reaching customers through multiple channels. As of 2023, Away operates 13 retail stores in major cities across the United States, the United Kingdom, and Canada. This expansion into brick-and-mortar locations is a strategic move to boost overall business and revenue, with retail stores expected to contribute almost 20% of Away's revenue in 2023.
Away's current annual revenue estimate stands at $236 million, indicating a steady recovery from the lows of the pandemic. The company's ability to rebound and adapt to changing market conditions is a testament to its resilience and the appeal of its products. As travel restrictions continue to ease and consumer confidence returns, Away is well-positioned to recapture its pre-pandemic success and reconnect with its customer base.
While Away has faced challenges, the company's innovative products, direct-to-consumer business model, and expansion strategies give it a competitive edge in the travel and lifestyle market. The brand's focus on design, functionality, and affordability has earned it recognition from notable publications, solidifying its place as a leading name in modern travel solutions.
London Calling: A Guide to Airlines Flying into the UK Capital
You may want to see also
Away's toxic work culture was exposed in a 2019 exposé
Away, the fast-growing luggage maker, has been criticised for its toxic work environment. In 2019, The Verge's Zoe Schiffer exposed Away's "cutthroat culture", where employees were regularly "brutally criticised" on public Slack channels.
Away's employees were attracted to the veneer and popularity of the brand, and the idea of joining an exclusive organisation. However, they were subjected to strict rules, such as refraining from personal communications and only using group conversations on Slack. This created a sense of interdependence among employees, making it difficult for them to refuse demands, such as working on holidays, for fear of letting their colleagues down.
The company's leadership frequently evoked the company's values, such as "thoughtful", "customer-obsessed", "iterative", "empowered", "accessible", and "in it together", to prescribe and injunct behaviour. This created a tall order for employees to meet unattainable standards of conduct. Away's CEO, Steph Korey, was often included in these leaked Slack conversations, where she would berate employees publicly. In one instance, she called the manager of a project "brain dead", and informed her team that no paid time off or work from home requests would be approved until they reached specific consumer experience milestones.
Following the exposé, Korey issued an apology, stating that she was "appalled" to read the messages she had sent and that she was "sincerely sorry". She also outlined steps the company was taking to improve its culture, including executive coaching for senior staff, diversity and inclusion training, 360 reviews, and establishing employee resource groups. Despite this, some have pointed to investors as the root cause of the problem, suggesting that they are willing to "overlook/champion psychological abuse" in the name of making the business successful.
Exploring the Expiration Policies of American Express Travelers Checks
You may want to see also
Away's new outdoor gear line, For All Routes (F.A.R.), is a major design departure
There is no indication that Away Travel is going out of business. In fact, the company is expanding its physical footprint, with a new store opening in San Jose, California, in 2023. The company also has plans for a new location in Washington, D.C., and additional stores to be announced.
Away Travel's new outdoor gear line, For All Routes (F.A.R.), is a significant design departure for the brand. F.A.R. is an outdoor-focused collection that marks a pivotal expansion for the travel brand into a rapidly growing post-pandemic travel market. The line includes versatile travel essentials for all types of outdoor adventures, featuring bags and accessories that are both modern and functional. The collection is designed to withstand almost all extreme weather conditions, with lightweight, high-strength, recycled polyester or nylon materials in vibrant colours. Each item includes easy-access pockets, adjustable straps, and compression technology for efficient packing.
The F.A.R. collection offers a range of adaptable outdoor-focused bags and accessories, including duffels, backpacks, packing cubes, totes, and more. The backpacks and duffels feature convertible straps for added convenience, and the collection offers various sizes to accommodate any outdoor getaway. The F.A.R. Tote 45L, for example, is perfect for the beach or mountains, serving as a carry-on with a trolley slip for easy attachment to checked luggage. The F.A.R. Messenger 16L is ideal for travellers who want to keep their tech secure, with a lightweight design and a side pocket for easy phone access.
The collection also includes the F.A.R. Organizational Cubes and Pouch accessories, designed to consolidate belongings and maximise space. The cubes and pouches are made from water-resistant nylon, with an easy clip to attach to another bag, ensuring the safe storage of important items like passports and cameras.
Away Travel's F.A.R. line is a thoughtful expansion of the brand's product offerings, catering to evolving customer trends and shifting travel behaviours. By focusing on the outdoors, Away aims to attract new customers while also expanding their offerings to existing customers who may have previously looked elsewhere for their outdoor travel needs. This collection brings a fresh perspective to the traditionally utilitarian category, offering a modern and innovative take on outdoor essentials through a travel lens.
Travel Abroad: Your Best Life Asset
You may want to see also
Frequently asked questions
No, Away Travel is not going out of business. In fact, the company is expanding its physical footprint, with a new store opening in San Jose, California, and another location planned for Washington, D.C.
Yes, Away Travel's sales dropped by 90% at the onset of the pandemic, which resulted in layoffs and furloughs for some of its staff.
Away Travel has expanded its product offerings beyond suitcases, launching outdoor travel gear such as backpacks and accessories like compression socks and travel blankets. The company is also focusing on retail expansion, with plans to open new stores in major U.S. cities and popular international destinations.