Matt Baer, who’s been chief executive officer of Stitch Fix Inc. since June, has a plan to get the styling service back to its roots and to “reimagine” its client experience.
But as he puts that to work to build for the future, the one-time digital darling is continuing to rack up losses as its revenues decline sharply.
Losses for the company’s fiscal second quarter narrowed to $35.5 million from $62.1 million. That put losses per share at 29 cents for continuing operations, 7 cents worse than the 22-cent deficit analysts projected.
Revenues for the three months ended Jan. 27 dropped 17.5 percent to $330.4 million from $400.6 million.
Investors were looking for more from the quarter and remain wary. Shares of the company fell 12.2 percent to $2.88 in after-hours trading on Wall Street.
Stitch Fix retreated from the U.K. in the first quarter, logging its business there as a discontinued operation. The company’s active clients from continuing operations fell by 6 percent to 2.8 million while revenues per active client slipped 3 percent to $515.
On a conference call with analysts, Baer acknowledged that, “There is additional work to be done to improve the trajectory of our business.
“The original Stitch Fix vision to create an easier and more enjoyable way for people to shop for clothing and accessories is as compelling and relevant today as when the company was founded 13 years ago,” the CEO said. “Our leadership in personalization technology, combined with our passionate and skilled stylists, continues to create an innovative and exciting way to shop. Our transformation efforts are grounded in fully realizing our vision and evolving the Stitch Fix experience.”
For years Stitch Fix has used a combination of AI and human stylists to send its clients a box of new styles on a regular schedule, letting them try everything on at home and keep what they want.
While that has long had Stitch Fix on the vanguard of the movement that has merchants trying to get ever closer to their customers, so far it hasn’t been enough.
So the company is working to strengthen its foundation and operate more efficiently while working on the client experience.
Baer said tweaks to the experience will “help us attract and engage the right clients and drive higher lifetime value.”
“We are taking a holistic approach to rethink how our clients engage with Stitch Fix and going forward, we are prioritizing a re-imagination of the client experience to focus on long-term growth,” he said.
That includes a new onboarding experience and new ways to help empower clients — and the personal touch.
“We plan to offer new touch points for clients to interact and develop more personalized connections with stylists,” Baer said. “Our stylists play a critical part in our value proposition, and our clients have told us they want to get to know the stylists behind their fixes. By enabling more direct ways to connect with stylists, we believe these relationships will become deeper and more meaningful.”
Stitch Fix already has a ton of data on its clients, from what brands they prefer to their size. Now the hope is to really connect and turn that relationship into something more — and fast. For the full fiscal year, however, Stitch Fix projected its revenues from continuing operations will continue to slide, falling by 17 percent to 19 percent to about $1.3 billion.
