Stitch Fix is getting rid of the full-time styling role, instead opting to staff its team of stylists with part-time workers in a cost-cutting move.
On Thursday, Stitch Fix sent out an email to stylists notifying them of the changes. Now, stylists face a choice: Both full-time and part-time employees have to choose from one of three “tiers” if they choose to stay with the company. They can either work 28 hours a week, 12 hours a week or a flexible number of hours sometime between 10 and 20 hours a week, which could ebb and flow from week to week depending on the level of client activity. The company also eliminated about 10 styling leadership positions as a result of these changes.
While Stitch Fix’s styling service is core to its business, these changes are just the latest retrenchment the company has made in its styling business over the last few years as the company tries to figure out the role and importance of stylists going forward. In fiscal 2023, Stitch Fix’s revenue decreased by 21% year-over-year, while its number of active clients decreased by 13%. Meanwhile, newer bets like its à la carte shopping service, Freestyle, haven’t panned out as planned. In June, Stitch Fix named a new CEO, former Macy’s chief digital officer Matt Baer, who so far sought to cut costs by sunsetting the company’s U.K. business and shrinking its fulfillment operations.
In an email to Modern Retail, a Stitch Fix spokesperson said, “As we continue to evolve our business to ensure we are delivering the most innovative, personalized and convenient online styling experience, this week we shared changes to our organization, including moving to a part-time only model for Stylists.” The spokesperson noted that the majority of stylists are part-time, and that by moving to a fully part-time model, Stitch Fix is able to maintain flexibility while “while effectively meeting the needs of our clients and our business.”
As a result of these changes — which will be effective as of March 31 — full-time employees will lose access to some benefits including health insurance.Full-time employees who opt not to take a part-time role will get a severance package.
In a subreddit designed to be for Stitch Fix stylists, members criticized the changes. Some said they were trying to figure out whether or not to quit or to drop down to part-time work, as well as what to do about the benefits they would lose through Stitch Fix. “I’ve been so overwhelmed and trying to talk this through with my partner,” one member of the subreddit wrote. “My benefits support us and my children and now being under 30 hrs I will lose my benefits as well as a solid chunk of our important income to support our family.”
Stitch Fix, founded in 2011, is a styling service that people turn to to find new clothing. Clients fill out an initial quiz with details about what they are looking for, and then stylists use that information — aided by the company’s algorithms — to send clients five items of clothing. Clients then send back any items they don’t want to keep. Clients pay a $20 styling fee, though that item goes toward any items they want to purchase. After amassing more than 2 million active clients in six years, Stitch Fix went public in 2017. But as growth started to slow, the company experimented with new concepts like an à la carte shopping service called Freestyle.
Stitch Fix has long described stylists as being “the heart of the business.” But this type of language has also created an inherent tension between Stitch Fix and its stylists whenever they are faced with layoffs or job changes.
In 2020, Stitch Fix employed about 8,000 people and 5,100 stylists, a mix of full-time and part-time employees. In its 2023 annual report, which Stitch Fix filed in July, the company reported that it now employed 5,860 people, including 2,620 stylists. Before Thursday, approximately a quarter of those stylists were full-time.
When Stitch Fix went public in 2017, it quickly became a darling on Wall Street, going public at a $1.4 billion valuation, and then surging to a $4.8 billion valuation roughly a year later.
But today, Stitch Fix’s market cap has fallen to just $384 million. The company has struggled to retain clients in the face of rising competition, which now includes rental services like Rent the Runway and Nuuly. In its fiscal first-quarter earnings, reported, in December, Stitch Fix reported a net loss from continuing operations of $26.2 million.
The first big change Stitch Fix made to its styling operations came in 2020, when the company laid off 1,400 stylists in California, citing the fact that it had gotten too expensive to employ so many stylists there. There were other changes that fueled tension between Stitch Fix and its stylists, like new metrics increasing the number of “fixes” clients had to complete in an hour, and an increased focus on using the company’s algorithms to complete fixes. And there have been more layoffs over the years as Stitch Fix losses grew and its active client numbers shrunk.
In the subreddit for Stitch Fix stylists, multiple members decried the company as a “sinking ship,” and as they figured out what their next steps would be, some were eager to finally get away from the company.
“Honestly, a big part of me feels relief and a bit of excitement that this will help drive me a bit more from this toxic company into places that are healthier for me and pursuits that are more me,” one member wrote.
FAQs
Stitch Fix is getting rid of the full-time styling role, instead opting to staff its team of stylists with part-time workers in a cost-cutting move. On Thursday, Stitch Fix sent out an email to stylists notifying them of the changes.
Did Stitch Fix get rid of stylist? ›
Stitch Fix is doing away with full-time styling positions as of March 31, the company confirmed by email. The news was first reported by Modern Retail. As of July 29, 2023, the styling box retailer employed about 2,620 stylists, according to its most recent annual report.
Why is the Stitch Fix closing? ›
Stitch Fix Inc
Its decision came down to its ongoing strategy refocusing, initiated in a bid to improve efficiency and maintain profitability. Stitch Fix first launched in the UK in 2019, in a bid to change consumer shopping habits.
How does Stitch Fix styling work? ›
You're always in charge. The $20 styling fee is charged when the stylist begins selecting pieces for your Fix—it gets credited toward anything you decide to buy. After Fix items are purchased online, we'll start curating outfits inspired by what you keep, with pieces you can buy instantly.
What is better than Stitch Fix? ›
Check out our list of the best alternatives, and read our in-depth reviews to find the subscription that's best for you.
- Trunk Club. 3.5 overall. ...
- Gwynnie Bee. 2.6 overall. ...
- Wantable Style Edit. 2.5 overall. ...
- Dia & Co. 2.5 overall. ...
- Fabletics. 3.6 overall. ...
- JustFab. 2.9 overall. ...
- Rent The Runway. 3.7 overall. ...
- Wantable Active Edit.
Stitch Fix is getting rid of the full-time styling role, instead opting to staff its team of stylists with part-time workers in a cost-cutting move. On Thursday, Stitch Fix sent out an email to stylists notifying them of the changes.
What is the controversy with Stitch Fix? ›
Remake previously reported that Stitch Fix's management is only 2.5% Black and 2.5% Hispanic/Latinx. Stitch Fix has repeatedly been criticized as a company led by white women at the expense of women of color and that seems to be increasingly more accurate.
Why is Stitch Fix struggling? ›
Carden added that the company has yet to leverage its breadth of shopper data as a new source of revenue. Stitch Fix is expected to continue losing customers going into 2024 due to the shuttering of the U.K. business.
Is Stitch Fix going downhill? ›
Stitch Fix on Monday said Q2 net revenue fell 17.5% to $330.4 million, with its number of active clients down 17% year over year.
Is Stitch Fix losing customers? ›
Stitch Fix revenue declined 18% year over year to $330.4 million, the company reported. Active customers fell 17% to 2.8 million year over year, and 6% over Q1. Meanwhile, net revenue per active client declined just 3% to $515.
Stitch Fix is part data-driven and part stylist-picked, so you have both an algorithm and a fashion professional on your side. Because of this, no two Fixes (what Stitch Fix calls the boxes) are the same.
How much does Stitch Fix pay to be a stylist? ›
The estimated total pay range for a Stylist at Stitch Fix is $19–$27 per hour, which includes base salary and additional pay. The average Stylist base salary at Stitch Fix is $20 per hour. The average additional pay is $3 per hour, which could include cash bonus, stock, commission, profit sharing or tips.
Is Stitch Fix actually personalized? ›
As you shop with us and we continue to learn more about you, your Stitch Fix Freestyle™ shop will continue to evolve to always show you the most personalized shopping experience. Personalized outfit and item suggestions change throughout the day, so don't wait if you see something you like.
What is going on with Stitch Fix? ›
Dive Brief: Stitch Fix is doing away with full-time styling positions as of March 31, the company confirmed by email. The news was first reported by Modern Retail. As of July 29, 2023, the styling box retailer employed about 2,620 stylists, according to its most recent annual report.
Is Stitch Fix closing? ›
Based in San Francisco, it launched its first and only international arm in the UK in 2019. In June, the company said it was exploring an exit of the UK market, and has now confirmed that it will wind down operations by 31 October. It will then focus on trading in the US.
What is Amazon's Stitch Fix called? ›
Amazon's Personal Shopper service operates very much like Stitch Fix. Customers give feedback about what styles they like, and then Amazon combines fancy technology with a human touch to curate a box of items for the client.
Can you request a stylist on Stitch Fix? ›
Can I request one? You can always request the same stylist—either by requesting them in your Fix Note or by leaving feedback after your Fix arrives.
Why is the Stitch Fix failing? ›
Reading into that trend, it appears customers who tried the service weren't impressed enough to keep using it. The company's active client count fell 11% year over year in the fiscal third quarter of 2023, and revenue per active client dropped 9%. That's a double whammy of bad news.
Does Stitch Fix use human stylists? ›
As a point of clarity, the staffing reduction doesn't completely eliminate roles for human stylists; Stitch Fix is simply shifting to a part-time-only employment model that apparently fits the way stylists already work, suggests the representative.
What is the lawsuit Stitch Fix? ›
In August 2022, Stitch Fix shareholders filed a lawsuit alleging that board members were aware in early 2021 of testing that demonstrated the Freestyle program would hurt customer acquisition and sacrifice Fix customers but failed to share that information publicly.
