| SAN FRANCISCO
SAN FRANCISCO Oct 17 Stitch Fix said it has
raised $12 million as it tries to establish itself in what is
proving a tricky market: online retail sales.
While online sales rise every year, many entrants have a
tough time with the razor-thin profit margins and ability to
differentiate themselves from established players such as
But Stitch Fix thinks it has found the right niche:
personalized styling, based on client data and algorithms.
Customers answer detailed questions on their lifestyle, body
shape and fashion preferences, and then Stitch Fix sends them an
assortment of clothing which they can keep or return. Most items
cost around $65, according to the company's website.
"The majority of the growth at Stitch Fix has been organic,
one customer telling another," Bill Gurley, the partner at
Benchmark Capital who is leading the investment, said in an
interview. Organic growth, rather than marketing-driven growth,
has been the hallmark of many other companies backed by venture
capital firm Benchmark, such as microblog Twitter, car service
Uber and auction site eBay Inc, he said.
Separately, Stitch Fix said in a press release it had hired
Lisa Bougie, the former general manager of emerging markets for
apparel company Nike Inc, as chief merchandising
officer; Meredith Dunn, the former senior director at retailer
Stella & Dot as vice president of styling; and Jennifer Olsen,
the former chief marketing officer at home retailer Crate &
Barrel, as chief marketing officer.
Another algorithm-based online retailer, bra vendor True &
Co., said earlier this month that it had raised $4 million from
backers including Crosslink, SoftTech, and Cowboy Ventures.
Others that play in niches online include Birchbox, a beauty
products provider known for its monthly subscription service,
and DollarShaveClub, which delivers razors.
Some online retailers are facing setbacks. Earlier this
month, Fab.com said it would lay off nearly 20 percent of its
workforce. In August, JustFab bought ShoeDazzle
which was struggling to gain traction.
Gurley is joining Stitch Fix's board, along with Marka
Hansen, former president of North America for clothing retailer
Gap, and John Fleming, former chief merchandising
officer of general merchandiser Wal-Mart Stores Inc.