Unstitched
Online personal stylist specialist Stitch Fix saw shares fall more than 17% earlier this week in the wake of another disappointing earnings report for the clothing company.
Although Stitch Fix has been using algorithms and machine learning to help select and ship boxes of clothes to customers since long before the AI hype train left the station, the company has seen its users dwindle, as revenues shrink and the struggle for profitability continues.
Out of style
Indeed, active clients in the most recent quarter had fallen some 33% from their 2022 peak, with just 2.8 million users having bought a box (or “Fix”) from the company in the last year. While Stitch Fix, like a handful of its competitors in the apparel space, is likely suffering from the post-pandemic shift in spending from goods to experiences, there could be even more at play behind its struggles.
Even though the company's clothing subscription service was a novel model when it first launched in 2011, it’s somewhat at odds with the new emphasis on making eco-conscious, sustainable fashion choices that’s been supercharged by Gen Z in recent years, as many modern shoppers look to pre-owned platforms like Depop, ThredUp, and eBay to get their online fashion fixes.
