Stitch Fix Headed for Great Britain
Stitch Fix Inc., an on-demand, personal-styling service based in San Francisco that offers online-apparel subscriptions and personal-shopping services, is headed to Great Britain next year.
The company’s co-founder, Katrina Lake, made the announcement during an Oct. 1 earnings call for the fourth quarter of fiscal 2018 and the full year.
Lake, the company’s chief executive, said there were several reasons that Stitch Fix chose Great Britain as its first international site to send monthly boxes of clothing to subscribers. “The U.K. is already an e-commerce, apparel-heavy economy. These customers spend more online than in the United States. That is an element we liked,” she said. “It is less discount-oriented than the United States, and that is always a healthy attribute. Also, the idea of having a personal-shopping alternative is really a different model in the U.K. and one the consumers there are excited about.”
Stitch Fix was founded in 2011 in Lake’s apartment in Cambridge, Mass., while she was studying at Harvard Business School. The company began by catering only to women, but it has subsequently expanded to men's clothing, plus sizes, maternity wear and kids.
Last year, the company went public, selling its stock on the Nasdaq.
For the fourth quarter of fiscal 2018, ending July 28, the company had 2.7 million active clients, a 25 percent increase over the same period last year.
Net income for the quarter was $18.3 million on $318.3 million in net revenues, a 23 percent over the previous fourth quarter’s revenues.
For the full year, net revenue increased 26 percent to $1.2 billion and net income totaled $44.9 million compared to a $594,000 net loss in fiscal 2017.
Paul Yee, the chief financial officer, said the company continues to increase its menswear business, which was launched two years ago. This growth has been helped by the company expanding from two warehouses to three warehouses, where automation is a major investment.
Childrenswear was added toward the end of fiscal 2018 with growth primarily in the older girls’ category. The company is working to satisfy customer demand in a timely manner. “Normal wait times are coming back,” said Mike Smith, the company’s chief operating officer.
Since 2017, the company has expanded its merchandise to include both lower-priced merchandise, which sells for $20 to $50 an item, and premium-brand offerings, which go for $100 to $600.
By the end of fiscal 2018, these two categories together nearly doubled as a percentage of total women’s unit sales and helped serve both a younger and an older client.
For fiscal 2019, the company is hoping to expand its net revenues by 20 percent to 25 percent over fiscal 2018, which will not include the U.K. expansion.