(Bloomberg) -- Direct-sales jewelry company Stella & Dot will exit Europe as the weakening pound and euro cut into profits.
The company, whose Avon-like business model involves individuals selling accessories to their social networks through websites and trunk shows, will end its European sales on April 7. After that date, members -- called stylists -- won’t be able to sell product or earn commissions, according to a letter from founder Jessica Herrin posted on social media.
The euro has dropped 4.4 percent against the dollar over the past 12 months, while the pound is down 6.3 percent. The weakening currencies have caused a once-profitable business to operate at a loss in Europe, according to the letter.
“Hoping for the economic climate to recover, we continued to invest in our European business,” Herrin said in the letter. “However, as the market remains uncertain into 2019, we have had to make this difficult decision.”
Political uncertainty in many parts of Europe, falling shopper confidence, an unclear Brexit plan and the potential for rising interest rates has made for a challenging retail environment in the region. Recent warnings from Asos Plc and Sports Direct International are unlikely to be the last.
Closely held Stella & Dot, whose investors include Sequoia Capital, launched under its current name in 2007. It expanded to the U.K. and Germany in 2012.
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