Stitch Fix

Last updated
Stitch Fix, Inc.
Company type Public
Industry Technology
FoundedFebruary 2011;13 years ago (2011-02), in Cambridge, Massachusetts, U.S.
Founders
Headquarters One Montgomery Tower, San Francisco, California,
U.S.
Key people
ServicesStyling
RevenueDecrease2.svg US$1,337 million (2024)
Increase Negative.svg −US$133 million (2024)
Increase Negative.svg −US$129 million (2024)
Total assets Decrease2.svgUS$487 million (2024)
Total equity Decrease2.svgUS$187 million (2024)
OwnersKatrina Lake (16.6%) [1]
Number of employees
4,570 (2024)
Website stitchfix.com
Footnotes /references
Financials as of August 3,2024. [2]

Stitch Fix, Inc. is an online personal styling service in the United States. It uses recommendation algorithms and data science to personalize clothing items based on size, budget and style. The company was founded in 2011 and had an initial public offering in 2017 with a valuation of $1.6 billion. [3] Stitch Fix generated $1.6 billion in net revenue in its fiscal year 2023, a decrease of 21% year-over-year and reported 3,297,000 active clients in September 2023. [4] It is headquartered in San Francisco, California and employs 5,860 people worldwide as of July 29, 2023. [5]

Contents

History

Stitch Fix delivery box Stack and box fall.jpg
Stitch Fix delivery box

Stitch Fix was founded in 2011 by Katrina Lake and former J.Crew buyer Erin Morrison Flynn. [6] [7] [8] The business was originally called Rack Habit, and was initially run out of Lake's apartment in Cambridge, Massachusetts. [9] [10] The company began by catering only to women, but it has subsequently expanded to men's clothing, plus sizes, maternity wear, and kids. [9]

In 2014, Stitch Fix started to be profitable. In July 2016, the company ended its fiscal year with recorded sales of $730 million, and in May 2017, the company had raised $42 million from outside investors. [9]

In November 2017, the company went public on Nasdaq. It was the first female-led company to launch an IPO in over a year. [11]

In October 2018, several class action lawsuits were brought against Stitch Fix alleging that the company had violated federal securities laws by making misleading statements about its growth prospects. [12]

As of 2019, the company had 8,000 employees including 5,100 stylists and more than 100 data scientists. [13] [14]

On June 2, 2020, the company announced layoffs for 1,400 employees, which was 18% of its total workforce, all of whom were remote workers in California. The affected employees were given the option of remaining with the company if they relocated. [15] The online retailer also announced it would hire roughly 2,000 stylists in cities that have a lower cost of living than those in California, such as Austin, Cleveland, Dallas, Minneapolis, and Pittsburgh. [16]

In August 2021, Elizabeth Spaulding replaced founder Katrina Lake as CEO. [17] In January 2023, Spaulding stepped down as CEO, and Lake returned as interim CEO. [18] Former Macy's executive Matt Baer was named CEO in June 2023. [19]

In June 2022, Stitch Fix laid off approximately 15% of its salaried staff, which equated to around 330 employees, citing slowing growth in the e-commerce retail industry as the reason for the cuts. [20]

In January 2023, Stitch Fix announced significant layoffs, cutting approximately 20% of its salaried workforce, alongside the departure of CEO Elizabeth Spaulding and the return of founder Katrina Lake as interim CEO; this decision was made due to declining sales and a need to restructure the company. [21]

Service

Stitch Fix is a personal styling service that sends individually picked clothing and accessories items for a one-time styling fee. Customers fill out a survey online about their style preferences. [22] A stylist at the company picks five items to send to the customer. Stylists pick items based on a customer's survey answers and any access the customer gives them to their social media outlets. The customer schedules a date to receive their items, which is referred to as a "Fix". Once the shipment is received, the customer has three days to choose to keep the items or return some or all of them. If the customer keeps at least one item, the initial styling fee is credited towards the cost of the item. In addition to the styling fee being credited, if the customer decides to keep all five items, the customer receives 25% off the total cost of the items. Customers choose the shipping frequency, such as every two weeks, once a month, or every two months. The company also supports integration with Pinterest boards, allowing customers to add photos of fashion looks that they like. These boards may be viewed by a Stitch Fix stylist. [23] [24]

The company uses data science and has combined personal stylists and machine learning (AI) for personalized recommendation. [25] [26] [27]

Media

Stitch Fix was referenced in a Wired article about recommendation algorithms, data science and astrophysics in Silicon Valley. [28] Wired also highlighted a new feature known as "Shop Your Looks," which suggests items matched to those previously purchased by customers. [13] Fast Company profiled the company and called attention to "its data prowess across every aspect of its business to reinvent the $334 billion U.S. apparel industry." It was recognized as one of the "50 Most Innovative Companies" for 2019. [29] Stitch Fix hosted a Golden Globes-like red carpet event in the 59th Street–Columbus Circle station in New York City and had a 60-second spot before the 2019 Academy Awards. [30] [31]

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References

  1. ↑ Thomas, Lauren; Lauren Hirsch (17 November 2017). "Stitch Fix shares retreat after IPO pop, close at $15.15". CNBC.
  2. ↑ "Stitch Fix, Inc. FY 2024 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. 25 September 2024.
  3. ↑ Debter, Lauren. "Stitch Fix Shares Pop In IPO, With Retailer Raising $120 Million". Forbes. Retrieved 2020-04-23.
  4. ↑ "Stitch Fix Announces Fourth Quarter and Fiscal Year 2023 Financial Results". Stitch Fix. Retrieved 2024-02-06.
  5. ↑ "Stitch Fix FORM 10-K". Stitch Fix. Retrieved 2024-02-06.
  6. ↑ Griswold, Alison (April 7, 2014). "Are You There, Margaret? It's Me, Ali". Slate.
  7. ↑ Hull, Dana (March 14, 2014). "Q&A: Stitch Fix founder Katrina Lake, on melding fashion and technology". San Jose Mercury.
  8. ↑ Sanders, Lorraine (July 11, 2014). "A new shopping 'fix' - themed packages of products". San Francisco Chronicle.
  9. 1 2 3 Merced, Michael J. De La; Benner, Katie (2017-05-10). "As Department Stores Close, Stitch Fix Expands Online". The New York Times. ISSN   0362-4331 . Retrieved 2017-05-10.
  10. ↑ "Why Stitch Fix and Its CEO Stand Out in Silicon Valley". Time. Retrieved 2018-06-17.
  11. ↑ "Stitch Fix Goes Public Marketing The First Tech IPO Led By a Woman This Year". Washington Post. November 17, 2017.
  12. ↑ "Stitch Fix hit with flurry of lawsuits over growth claims". Retail Dive. Retrieved 2018-10-19.
  13. 1 2 Pardes, Arielle. "Need Some Fashion Advice? Just Ask the Algorithm". Wired. Retrieved 2020-04-23.
  14. ↑ "The personal stylists who are training the bots to be personal stylists". The Washington Post . Retrieved 2020-04-23.
  15. ↑ Canales, Katie. "Online clothing retailer Stitch Fix is laying off 1,400 California employees and instead hiring in lower-cost cities like Austin and Minneapolis". businessinsider.com. Retrieved 3 June 2020.
  16. ↑ Kolodny, Lora (2020-06-01). "Stitch Fix is laying off 1,400 employees in California, and plans to hire in lower-cost U.S. cities". cnbc.com. Retrieved 2020-06-03.
  17. ↑ Segran, Elizabeth (2021-04-23). "Stitch Fix sells $1.7 billion of clothes each year. Now, its visionary CEO is passing the baton". Fast Company. Retrieved 2022-04-04.
  18. ↑ York, Alexandra (2023-01-06). "Stitch Fix founder Katrina Lake returns as CEO. Here are 5 others who went back to run their former companies". Business Insider. Retrieved 2023-02-13.
  19. ↑ "Stitch Fix announces appointment of Matt Baer as Chief Executive Officer; Founder and interim Chief Executive Officer Katrina Lake will continue on in her role as Executive Chairperson of the Board | Stitch Fix". investors.stitchfix.com. Retrieved 2024-12-15.
  20. ↑ Thomas, Lauren (2022-06-09). "Stitch Fix shares sink after company announces layoffs, offers weak guidance". CNBC. Retrieved 2024-12-11.
  21. ↑ Movement, Q. ai-Powering a Personal Wealth. "Layoff News: Stitch Fix To Replace CEO And Cut 20% Of Workforce". Forbes. Retrieved 2024-12-11.
  22. ↑ "Stitch Fix Review: What to Know Before You Buy". The New York Times. ISSN   0362-4331 . Retrieved 2022-05-13.
  23. ↑ Peterson, Hayley (March 12, 2015). "This hot fashion startup eliminates the hardest part of shopping". Business Insider.
  24. ↑ Ciambriello, Roo (August 1, 2014). "Why Did These $68 Shorts From Stitch Fix Show Up With a $24.97 Price Tag From Nordstrom Rack?". Adweek.
  25. ↑ Strong, Jennifer (14 January 2019). "Stitch Fix Uses Machine Learning to Augment the Human Touch". Wall Street Journal.
  26. ↑ "By Humanizing Brands With AI, Common Marketing Issues Will Cease". 10 January 2019.
  27. ↑ "Stitch Fix: The Amazing Use Case Of Using Artificial Intelligence In Fashion Retail". Forbes .
  28. ↑ Pardes, Arielle. "The Style-Quantifying Astrophysicists of Silicon Valley". Wired.
  29. ↑ "Stitch Fix's radical data-driven way to sell clothes–$1.2 billion last year–is reinventing retail" . Retrieved 2020-04-23.
  30. ↑ "Stitch Fix Set Up a Red Carpet for Real Guys in NYC". 22 February 2019. Retrieved 2020-04-23.
  31. ↑ "Stitch Fix debuts new brand campaign on Oscars night". 24 February 2019. Retrieved 2020-04-23.
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