Online used-vehicle retailer Shift Technologies Inc. said it reduced headcount by about 30 percent and reported a wider loss from operations and shrunken revenue in the fourth quarter.
On a Tuesday earnings call, Shift Technologies CEO Jeff Clementz said the majority of reductions stemmed from the company’s move to a “decentralized sales organization” in February. Corporate roles also were reduced, he said, though the exact number was not immediately clear.
The retailer reported a $60.7 million fourth-quarter loss from operations, wider than a $53.2 million loss in the year-earlier period. Revenue during the quarter plunged 67 percent to $65.6 million.
The company posted net income of $13 million compared with a net loss of $75.8 million during the same quarter last year. But the most recent quarterly results included a one-time gain of $76.7 million from the acquisition of used-vehicle consignment company CarLotz Inc.
The retailer closed on that acquisition in December. Integration of the two companies included eliminating “duplicative costs and roles,” Clementz said.
Then, in February, it shed physical stores on the East Coast obtained through that merger. The retailer also noted it shut down a CarLotz location in Downers Grove, Ill., to focus on its core West Coast presence. One CarLotz location remains in Pomona, Calif.
“We believe that the CarLotz integration and strategic moves to rightsize our [selling, general and administrative expenses] are largely behind us,” Clementz said.
Those changes were part of the retailer’s transition to an omnichannel sales model, which is now complete, Clementz said. Omnichannel refers to technology and processes aimed at providing a seamless buying experience for consumers whether they shop online, in-store or both.
The company is aiming to decrease vehicle handoffs, increase efficiency and reduce costs via the revised sales model, Clementz said.
“Going forward, local teams will take on more ownership of individual deals and will be assisted by a smaller central organization,” he said.
In addition to the Pomona location, Shift Technologies has remaining locations in Portland, Ore.; the San Francisco Bay Area; and Los Angeles.
Shares of Shift Technologies fell 25 percent to $1.25 in morning trading Wednesday.
The retailer also formally announced it regained compliance with the Nasdaq stock exchange’s listing requirement of $1.
Q4 revenue: $65.6 million, down 67 percent from the year-earlier period.
Q4 loss from operations: $60.7 million, wider than loss of $53.2 million in the year-earlier period.
Q4 retail vehicles sold: 2,520, down 61 percent.
Q4 gross profit per retail vehicle: $895, down 53 percent.
2022 revenue: $670.8 million, up 5 percent compared with the year-earlier period.
2022 loss from operations: $237.5 million, wider than loss of $176.9 million in the year-earlier period.
2022 retail vehicles sold: 20,961, down 10 percent.
2022 gross profit per retail vehicle: $1,208, down 42 percent.
