Stitch Fix, the online personal stylist-led shopping service, is planning to launch in the UK next year as sales growth in its home market of the US shows signs of slowing.
The San Francisco-based business said year-on-year growth in active clients, defined as those who have received an order in the past 12 months, slowed from 30% in the third quarter to 25% in the fourth quarter. It reported total active clients of 2.74m, down against analysts’ expectations of 2.8m.
These figures overshadowed otherwise encouraging results in the final quarter in which revenue grew by 23% to $318.3m, though this was slightly down on the $318.93m analysts expected. It also reported net income of $18.3m, compared to a loss of $4.5m in the same period last year.
Full year revenue rose 26% to $1.2bn, which was in line with analysts’ forecasts, and it said it expected to achieved a further 20%-25% growth in the next fiscal year.
The decision to bring its service to the UK, its first international venture, has been driven by this market’s strong appetite for online shopping, and it has been working on its proposition for the UK for a year.
Stitch Fix works by inviting customers to complete an online questionnaire about their style needs, preferences and sizing. A personal stylist will then curate a selection of five items of clothing and accessories, which are despatched to the customer who has three days to decide what they keep.
A $20 fee is applied to the styling service but this is discounted from any purchases made. Once a customer has decided what, if anything, they would like to keep they can check out online and complete the purchase. Any unwanted items can be returned for free.
The service can be automated so the customer receives regular boxes, or the customer can choose to order a box at any point in time. It is available for men, women and children and there are specialist services for petite, plus size and maternity. The more a customer orders and feeds back on the service the more accurate the curation of goods becomes.
“We believe our ability to create a uniquely personalised shopping experience is something that will resonate with consumers and brands outside of the US,” said founder and CEO Katrina Lake.
Stitch Fix was founded in 2011 by Lake and former J.Crew buyer Erin Morrison Flynn and initially just served women. It received backing from a number of private equity firms before floating on NASDAQ last November. At the time of its IPO it was valued at $1.6bn but its shares have more than doubled since and it now has a market capitalisation for around $4.3bn.