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Tue May 2 2017 17:14:40

Shakeup at Etsy as CEO Steps Down

By: Ina Steiner

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Drama surrounded Etsy today, nearly obscuring its first-quarter earnings release. First, an activist investor issued a press release pressuring the company to make some big changes, even suggesting the company put itself up for sale.

Etsy then announced CEO Chad Dickerson would be stepping down, replaced by a candidate who couldn't be more different from the low-key touchy-feely CEO he's replacing. Josh Silverman was at the center of the eBay-Craigslist corporate governance lawsuit - as EcommerceBytes 411 reported in November when Silverman joined the Etsy board, he had been sued by Craigslist for breach of fiduciary duty.

Etsy is also separating the roles of CEO and Chairman. As Silverman becomes CEO officially on Wednesday, Fred Wilson will come on board as Chairman. Wilson joined the Etsy Board in June 2007 and has served as lead independent director since October 2014.

Etsy's Chief Technology Officer John Allspaw is also leaving the company.

First Quarter Earnings:
And Etsy reported earnings today. It saw year-over-year growth of Gross Merchandise Sales (GMS) of 14.2% in the first quarter.

Etsy grew total revenue 18% year over year in the first quarter of 2017 to $96.9 million. Markets revenue grew 14.1%, while Seller Services revenue grew 23.9% year-over-year, driven primarily by revenue growth in Etsy Payments. 

Net loss for the first quarter of 2017 was $0.4 million, compared with net income of $1.2 million in the first quarter of 2016. "Etsy's net loss in the first quarter of 2017 included interest expense associated with the build-to-suit lease accounting related to our new headquarters, a $2.8 million foreign exchange gain and an income tax benefit of $1.1 million, all primarily non-cash."

You can find the full press release on this page of the Etsy Investor Relations website.




Comments (35) | Permalink

Readers Comments

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

This user has validated their user name. by: Ina

Tue May 2 17:54:11 2017

Outgoing Etsy CEO Chad Dickerson just announced layoffs

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: pace306 This user has validated their user name.

Tue May 2 18:04:16 2017

"Net loss for the first quarter of 2017 was $0.4 million"

That line is a wake up call for EBAY .. who will experience the exact same fate if they dont stop the games!

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

This user has validated their user name. by: Ming the Merciless

Tue May 2 18:49:36 2017

Another MBA without ethics.

Run, don't walk, from Etsy.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

This user has validated their user name. by: eXtinctBay

Tue May 2 23:56:17 2017

Let's take a look here. Their revenue increased, but they posted a loss.....

Guess Etsy bean counters are not as skilled as the eBay accountants in regards to fudging figures / cooking the books.

Like not subtracting the dollar value of returned items from income statements. Or items sold with ''free shipping'' (which is included in the inflated item price).

Guess the hiding of listings and other eBayesque tricks didn't work. Not to mention the use of PayPal.

The artisans who offered their goods on Etsy found it was more efficient to sell on Amazon Handmade. Or just start their own website.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Noneya This user has validated their user name.

Wed May 3 00:37:54 2017

Starting your own website is correct - Once Chad decided to allow mass produced crap made in China to be sold as handmade, the site really took a nose dive in sales and integrity.
It went from unique handmade goods to a load of crap bought off ebay at a wholesale discount and falsely branded as 'handmade' with a 1000% markup. Lack of buyer trust contributed greatly to the downfall of what was once billed as the last refuge for real artists who took their skills seriously. The hotest sellers on Etsy are in the 50. and under price range, you don't get those prices without cheap child labor.  

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Sierra This user has validated their user name.

Wed May 3 01:42:23 2017

Ummm ... there is still a lot of handmade art on Etsy.  

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: ssweet This user has validated their user name.

Wed May 3 01:42:36 2017

Scary thought: Silverman was at Etsy during the fiascos of January and February.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Sierra This user has validated their user name.

Wed May 3 01:43:42 2017

Most of my Etsy listings are under $50 and I can assure you that I have never ever employed child labor.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: macsbaby This user has validated their user name.

Wed May 3 03:03:29 2017

Oh great....its an ex ebay CEO. Crying face imoji here.  

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Duster This user has validated their user name.

Wed May 3 03:20:44 2017

I'm feeling better and better about my shop being suspended in 2 weeks. {Due to non compliance with giving them my bank account number, photo ID, and SS numbers}.
Etsy has been hacked in the past & personal info was "shared".  I won't take the risk of identity theft and money theft.
Bottom line though is that I don't trust Etsy with my money or my business!  
 

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: VintageLady This user has validated their user name.

Wed May 3 06:47:30 2017

I am no economist but I don't believe the quarterly losses (which seem not significant per se) are the main reason for such downfall. The writing was on the wall since Etsy over-confidently went public with a lofty concept, confusing manifesto (remember the ''Etsy is a tech company'' statement) inadequate ad campaigns and a business model that was not really sustainable in the long run, basing their revenue on selling second rate services to sellers.
This shakeup looks more like ''the rats abandoning the sinking ship''to me. The future doesn't look promising for the Sellers.
I was a Seller on Etsy as well  and I can testify to the general dilletantism and constantly experimental character of the website and their negative effect on actual sales and the sellers who trusted and supported Etsy.  

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: glasspackaging This user has validated their user name.

Wed May 3 07:25:27 2017

Well they lost another seller for a targeted key category of craft supply sellers ... we do not react to forced rules the same as small handmade, though we supply many of the key product they need for handmade.... we were one of the few who actually adhered to the collectible and supply rules ... and had enough of their games to leave.(with 100% great feedback on etsy) .... they will no longer make it, long term, as they are just. Emulating the eBay mistakes.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Chicago48 This user has validated their user name.

Wed May 3 07:39:53 2017

Compared to Ebay 18% is good.  Ebay was 2%.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Watching the Wheels This user has validated their user name.

Wed May 3 07:45:38 2017

I'm not understanding making WILSON Chairman. He'S
s been involved since the get go.

WHAT, all of a sudden MADE HIM SEE THAT ETSY HAD PROBLEMS?

Where was the guidance from ANY  of the shurts, that COULD HAVE CREATED A WELL RUN SITE?

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Flying Childers This user has validated their user name.

Wed May 3 08:14:12 2017

It was great for the sellers who have been documenting all the dirty tricks,  to finally be vindicated.

http://www.businesswire.com/news/home/2017050200599
9/en/black-and-white-Capital-Calls-Change-Etsy

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

This user has validated their user name. by: Rexford

Wed May 3 08:52:42 2017

Etsy had something special in their early days.  Disgruntled eBayers were flocking there, so my question is, WHY would they put someone tied to eBay, especially one with so much baggage, on their Board?

And by the way, if you are letting an investor (and substitute "greed" for "activist") make your company decisions, you need to go back to business school.

Yet another example of a company ruined by going public.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Duster This user has validated their user name.

Wed May 3 12:14:38 2017

The losses are not just quarterly. They have been consistently raking in more money every year since at least 2014 and going into debt.  
55% of their revenues come from extra services sold to Etsy shops, while the other 45% comes from fees on sales through those same shops.  All the money comes from us!
At least Etsy is all over the financial pages today.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: marcello This user has validated their user name.

Wed May 3 14:28:01 2017

If you've taken the time to read the letters from the board to the CEO you will see they were 100% correct in the points they made.
All of this lamenting about handmade vs goods from China has not a thing to do with why this site is dismally failing. Etsy, under grossly incompetent management has lavished luxuries and perks on their unskilled, bungling, amateurish staff while arrogantly refusing to meet the needs and solve the problems of its buyers and sellers.
Severely outdated technology, dismal search functionality, many misspelled words yielding null results, unrestrained keyword spamming, irrelevant, search results, lack of coherent categories, diabolical search manipulation, an inadequate 5 photo allotment per item listing, outdated photo viewer and zoom, removing sellers ability to access the home page of the site when signed into their accounts, combining product listings with detailed buyer feedback on the shop landing page, and continual unskilled ineffectual tinkering, breaking instead of improving seller tools. Doing nothing to solve their 44% bounce rate while being more preoccupied with boasting about what a wonderful do-gooder company they are.
For 8 years I have had a very successful business on Etsy and in the last 2 years have watched my views and sales plummet by 80%. This nosedive has only occurred on Etsy and not on any of the other venues I sell on. Chad Dickerson and his inept staff have driven my shop straight into the ground.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: TMoore This user has validated their user name.
Web Site

Wed May 3 15:21:29 2017

@Duster -  So, you would rather NOT get paid? Etsy's request for identification protects you from ID theft, and ensures you get paid for your net sales. Etsy can download your funds directly into your bank account. Have you even read the rules? You can't do business on Etsy without these things being in place. Think about your paranoia and get with the program.

Shakeup at Etsy as CEO Steps Down   Shakeup at Etsy as CEO Steps Down

by: Watching the Wheels This user has validated their user name.

Wed May 3 19:49:40 2017

Does anyone have the name of the investor who had the sense to pitch a fit?

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