The clothing subscription service, the only female-led tech IPO in 2017, has consistently defied naysayers
Nevertheless, they persisted.
Stitch Fix has fought off headwinds since it went public as the only female-led technology IPO last year. There were worries that it would be another Blue Apron, the food subscription service that was 2017’s worst-performing new major IPO. They were critics who wondered how many women would really want apparel picked by a stylist and algorithm shipped to them regularly.
Those doubters prompted the clothing subscription company to price its offering at $15 last November, lower than expected. This was despite how, unlike many other unicorns, Stitch Fix was profitable on a net income basis for two years prior to its listing.
Since then, the company has seen two consecutive quarters of profitability and growth. For its latest earnings report, Stitch Fix said it added 100,000 new clients in the last three months; revenue grew about 25%, higher than estimates. The San Francisco outfit now has a market capitalization of $2.27 billion, up over 60% from five months ago.
“It has yet to hit a wall,” one analyst told the Wall Street Journal.
There are obviously good reasons to cast shade on any company—Stitch Fix’s gross margins did decrease— but one can’t help wonder if some of the criticism directed against the fashion-tech hybrid was simply due to sexism. After all, only 15.8% of startups globally have at least one female founder, according to Crunchbase.
That’s something Katrina Lake, Stitch Fix’s co-founder and chief executive, has long had to deal with. “I knew that I was pitching a female-oriented product to a very male-oriented audience,” she told Marketplace last month of her difficulties raising money. “Clients love it and they’re waiting to get the service. And yet, people were like, ‘I just, like, I just can’t get excited about it.’”
And even when Lake managed to raise money, she had to fend off unwanted advances. In 2013, she asked one of her backers to remove a Stitch Fix director because he’d sexually harassed her. The alleged perpetrator, VC Justin Caldbeck, was relieved of the job but Lake was ordered to sign a non-disparagement agreement about the incident.
For now, Lake is looking ahead. The company recently launched a new feature called Extras, which allows women to pick out bras and underwear to be shipped together with their regular box.
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