Stitch Fix CEO Steps Down From Company Suddenly

In a move that surprised Wall Street this week, the CEO of Stitch Fix, Katrina Lake, has stepped down from her position.

Lake had founded the online styling service company roughly ten years ago while studying at Harvard Business School. She took the company public in 2017. At the time she was the youngest woman to take a company public.

Shares debuted on the Nasdaq at $16.90 in 2017 and were $49.49 at market close on Tuesday. Its market value is $5.26 billion.

Stitch Fix president Elizabeth Spaulding will be taking over as CEO effective August 1st.

Today the company boasts about 4 million clients in the United States and the U.K. It has about 8,000 employees.
Shares of the company’s stock were down over 5% after the news was announced.

In the last year the company had been struggling with shipping delays and reduced spending by its customers. The company also missed analysts’ expectations for revenue in the first quarter when it reported results last month.

Stitch Fix also revealed that its active clients had spent an average of $467. This was down 7% compared to the same time a year ago.
The company had additionally laid off 1,400 stylists in California, or about 18% of its workforce, last year. The company is planning to hire 2,000 stylists in other parts of the U.S. with a lower cost of living, such as Dallas or Minneapolis.

According to the company’s press release, Lake will remain involved in the company as executive chairperson of its board. It said she will also focus on the personal styling service’s sustainability efforts and its marketing.

“Apparel retail is undergoing a reinvention, and Stitch Fix is exceedingly well-positioned to lead through it,” said Lake. “This moment of transformation in our business and our industry makes it the right time to think about the next generation of leadership at our company.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.