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Just 17 months ago everting was working great for Stitch Fix.
The subscription-based online personal shopping service, was growing fast, the pandemic help the company to reach new levels of revenues.
In January 2021, shares were trading at more than $96 apiece. And the company was valued at almost 11 billion $. And at that time, it seems that the Stitch Fix model, proving to be a winner.
Stitch Fix is an online personal styling service. It uses data and technology to curate a selection of clothing and accessories for each customer based on their individual style, fit, and price preferences. Customers receive a “Fix” of five items chosen for them and pay for what they keep. The company earns revenue through the sale of clothing and a styling fee for each Fix.
Katrina Lake founded Stitch Fix in late 2010 and took the company public in 2017. At the time, she was the youngest woman to do so. But in August of 2021, she relinquished her day-to-day oversight of the company to become its executive chairperson, a role Lake said at the time she would use to focus on Stitch Fix’s sustainability efforts and its marketing. In her stead, Stitch Fix promoted to the role of CEO Elizabeth Spaulding, who joined the company as president in 2020 and worked previously as a partner at Bain & Company.
While shoppers actively used Stitch Fix while trapped in their homes during the pandemic, the business suffered as COVID-related restrictions were lifted and those same customers ventured out to spend some of those discretionary dollars. Further, a direct-buy option instituted during Spaulding’s brief tenure, wherein Stitch Fix invited customers to buy single items without signing up for a plan or paying a styling fee, appears not to have panned out.
So now the company is struggling. The company’s recent fiscal year results revealed its struggles. In its most recent fiscal year, the company reported a net loss that widened to $207.1 million from $8.9 million.
In the company-wide memo, founder Katrina Lake said the following:
“We will be losing many talented team members from across the company and I am truly sorry. Everyone will get an email soon letting you know what this means for you,” wrote Lake in the memo.
Lake, now stepping in as interim CEO following Spaulding’s departure, said in the memo that “despite the challenging moment we are in right now, the board and I still deeply believe in the Stitch Fix business, mission and vision.”
In 1997 Steve jobs came back to save Apple, then a struggling computer company, and the rest his history.
So can now Katrina Lake do the same and save the company she founded?
Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
