About Stitch Fix

Stitch Fix, Inc. (Stitch Fix) delivers personalization to its clients through the pairing of data science and human judgment. Stitch Fix operates in the United States and United Kingdom. Clients can engage with the company in one of two ways that, combined, form an ecosystem of personalized experiences across styling, shopping, and inspiration by receiving a personalized shipment of items informed by its algorithms and sent by a Stitch Fix stylist (a Fix); or by purchasing directly from its website or mobile app based on a personalized assortment of outfit and item recommendations (Freestyle). Clients can choose to schedule automatic shipments or order a Fix on demand after they fill out a style profile on the company’s website or mobile app. After receiving a Fix, its clients purchase the items they want to keep and return the other items, if any. Freestyle utilizes the company’s algorithms to recommend a personalized assortment of outfit and item recommendations that will update throughout the day and will continue to evolve as it learns more about the client. In its first few years, the company is able to gain a deep understanding of its clients and merchandise and build the capability to listen to its clients, respond to feedback, and deliver the experience of personalization. The company has since extended those capabilities into Men’s, Kids, Petite, Maternity, and Plus apparel, as well as shoes and accessories. The company’s clients share personal information with it, including detailed style, size, fit, and price preferences, as well as unique inputs, such as how often they dress for certain occasions or which parts of their bodies they like to flaunt or cover up. The company’s clients are motivated to share these personal details with it and provide it with ongoing feedback because they recognize that doing so will result in more personalized and successful experiences. The very human experience that the company delivers is powered by data science. The company’s data science capabilities consist of its rich data set and its proprietary algorithms, which fuel its business by enhancing the client experience and driving business model efficiencies. The vast majority of the company’s client data is provided directly and explicitly by the client, rather than inferred, scraped, or obtained from other sources. The company also gathers extensive merchandise data, such as inseam, pocket shape, silhouette, and fit. This large and growing data set provides the foundation for proprietary algorithms that the company uses throughout its business, including those that predict purchase behavior, forecast demand, optimize inventory, and enable it to design new apparel. With a Fix, the company leverages its data science through a custom-built, web-based styling application that provides recommendations to its stylists from its broad selection of merchandise. The company’s stylists then send the most relevant items from its merchandise to a client in their Fix. The company’s stylists provide a personal touch, offer styling advice and context to each item selected, and help it develop long-term relationships with its clients. The company offers merchandise across multiple price points and styles from established and emerging brands, as well as its own private labels. Many of the company’s brand partners also design and supply items exclusively for its clients. Service The company helps millions of clients discover and buy what they love through personalized apparel, shoes, and accessories. Data Science Advantage The company’s data science capabilities fuel its business. These capabilities consist of the company’s rich and growing set of detailed client and merchandise data and its proprietary algorithms. The company uses data science throughout its business, including to style its clients, offer personalized direct buy options, predict purchase behavior, forecast demand, and optimize inventory. The company’s data set is particularly powerful because: the vast majority of its client data is provided directly and explicitly by the client, rather than inferred, scraped, or obtained from other sources; its clients are motivated to provide the company with relevant personal data, both at initial sign-up and over time as they use its service, because they trust it will improve their shopping experience; and its merchandise data tracks dimensions that enable it to predict purchase behavior and deliver a more personalized experience. Historically, over 81% of the company’s Fix shipments have resulted in direct client feedback. This feedback loop drives important network effects, as its client-provided data informs not only its personalization capabilities for the specific client, but also helps it better serve other clients. In addition, Style Shuffle, an interactive mobile and web-based feature in which participants rate Stitch Fix merchandise and outfits, has collected more than 10 billion Style Shuffle ratings, and provides additional data to strengthen its understanding of client tastes and style preferences. The company encodes each of its SKUs with numerous information attributes to help its algorithms make better recommendations for its clients. The information the company stores for each SKU includes: basic data, such as brand, size, color, pattern, silhouette, and material; item measurements, such as length, width, diameter of sleeve opening, and distance from collar to first button; nuanced descriptors, such as how appropriate the piece is for a client that prefers preppy clothing or whether it is appropriate for a formal event; and client feedback, such as how the item fits a 5’7 inches client or how popular the piece is with young mothers. The company’s algorithms use its data set to match merchandise to each of its clients. For every combination of client and merchandise, the company computes the probability the clients will keep that item based on their and other clients’ preferences and purchase history as well as the attributes and past performance of the merchandise. Pairing Data Science and Human Judgment The company’s advanced data science capabilities harness the power of its data for its stylists and clients by generating predictive recommendations to streamline the curation process, and in the case of Freestyle, generate highly personalized items and outfit recommendations in near real-time. For clients who prefer the assistance of a stylist, these stylists add a critical layer of contextual, human decision making that augments and improves the company’s algorithms’ selections and creates the ultimate personalization experience. Merchandise, Brand Partners, and Owned Private Label Brands The company’s algorithms filter over one thousand SKUs to recommend a subset of relevant merchandise to its stylists or clients, who leverage the information to select or purchase merchandise. The company sources merchandise from brand partners and also create its own merchandise to serve unmet client needs. The company offers apparel, shoes, and accessories across a range of price points. The company serves its clients in the following categories: Women’s, Men’s, Kids, as well as Petite, Maternity, and Plus. Brand Partners The company partners with established and emerging brands across multiple price points and styles. With many of its brand partners, the company develops third-party branded items exclusively sold to Stitch Fix clients. This exclusivity allows the company’s clients to discover personally recommended products that are unavailable elsewhere. Brands and Products Exclusive to Stitch Fix The company offers products exclusive to Stitch Fix through Owned Private Label Brands. The company brings to market its own styles, which it refers to as Owned Private Label Brands, in order to target specific client needs that are unmet by what its merchandising team can source in the market. The company uses data science to identify and develop the new products for its Owned Private Label Brands. The company then pairs its data with the expertise of its merchandise vendors to bring these new products to market. The company expects is product development efforts will yield better products for its clients as it acquires more data and feedback. Strategy The key elements of the company’s strategy are to expand its relationships with existing clients; acquire new clients; and expand its addressable market. Seasonality Seasonality in the company’s business does not follow that of traditional retailers, such as typical high concentration of revenue in the holiday quarter (year ended July 29, 2023). Historically, the company’s net sales have not been concentrated in a particular period or season, with 28%, 25%, 24%, and 23% of its annual net sales being recognized during the first, second, third, and fourth quarters of the fiscal year ended July 29, 2023, respectively. Intellectual Property The company protects its intellectual property through a combination of trademarks, domain names, copyrights, trade secrets, and patents, as well as contractual provisions and restrictions on access to its proprietary technology. The company’s principal trademark assets include the trademarks Stitch Fix and Fix, which are registered in the United States and some foreign jurisdictions, its logos and taglines, and multiple private label apparel and accessory brand names. The company has applied to register or registered many of its trademarks in the United States and other jurisdictions. The company is the registered holder of multiple domestic and international domain names that include stitchfix and similar variations. The company also holds domain registrations for many of its private label brand names and other related trade names and slogans. Government Regulation Apparel, shoes, and accessories sold by the company are subject to regulation by governmental agencies in the United States and in the U.K. These regulations relate principally to product labeling, licensing requirements, flammability testing, and product safety. The company is also subject to environmental laws, rules, and regulations. Similarly, apparel, shoes, and accessories sold by the company are also subject to import regulations in the United States and other countries concerning the use of wildlife products for commercial and non-commercial trade, including the U.S. Fish and Wildlife Service. History The company was founded in 2011. It was incorporated in Delaware in 2011. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011.

Country
Industry:
Catalog and mail-order houses
Founded:
2011
IPO Date:
11/17/2017
ISIN Number:
I_US8608971078
Address:
1 Montgomery Street, Suite 1500, San Francisco, California, 94104, United States
Phone Number
415 882 7765

Key Executives

CEO:
Baer, Matt
CFO
Aufderhaar, David
COO:
Data Unavailable