How Stitch Fix Fumbled a Make-or-Break Pivot

Stitch Fix planned to revive sales growth by turning its original strategy on its head. Inside the company, there were warning signs that the effort would struggle.

The retailer, which is best known for sending customers five-piece boxes of clothes and accessories picked out by stylists, hoped to broaden its appeal by using algorithms to recommend items for people to buy directly online. But a test last summer showed that approach wasn’t resonating with first-time visitors to Stitch Fix’s site, four people familiar with the matter told The Information.

Senior marketing leaders urged delaying a broader rollout that would funnel potential customers to the newer option, one of the people said. Even so, CEO Elizabeth Spaulding, who has made the strategy a centerpiece of her tenure, pushed ahead with a full release last summer. The change wound up hurting overall sales, and forced the company to slash its revenue forecasts for the coming quarters.