Stitch Fix explores UK exit amid falling revenue in Q3
The company plans to refocus on its ‘styling first’ business in the US by moving to a three distribution centre network from its current five
Stitch Fix is exploring the possibility of exiting the UK market in FY23, after its net revenue decreased 20% year-over-year to $394.9m (£316.7m) in the third quarter ended 29 April.
According to Stitch Fix, since first entering the UK market in 2019, the macroeconomic environment and the group have changed.
This comes as the retailer’s active clients fell 11% (431,000 people) year-over-year from a total of 3,476,000. This affected the group’s net revenue per active client of $502 (£402.61), which fell 9% year-over-year.
In addition, the group also suffered a net loss of $21.8m (£17.4m) and diluted loss per share of $0.19 (£0.15).
As a result, the company plans to refocus on its “styling first” business in the US by moving to a three distribution centre network from its current five.
Katrina Lake, interim CEO of Stitch Fix, said: “We continue to focus on delivering profitability and preserving cash flow, and I’m proud of how far we’ve come. This quarter we delivered adjusted EBITDA of $10.1m (£8.1m), exceeding our guidance range and significantly expanding our free cash flow.
“We continue to focus on ways to drive efficiencies across our business, while at the same time invest in the core capabilities that have set Stitch Fix apart from the beginning – personalization powered by our industry-leading data science and AI.”
She added: “Looking forward, we’re confident that we have the right strategy in place to return us to profitable growth, while realising our mission to help our clients look and feel their best.”
