Stitch Fix has officially filed for an initial public offering, revealing that it earned nearly $1 billion in annual sales.
According to news from The Wall Street Journal, the six-year-old personal shopping startup’s revenue surged to $977 million in the year ending July 29, from $73 million in 2014. While some of that profitability can be attributed to the company’s limited marketing expenses, its prospectus noted that Stitch Fix plans to increase marketing expenses in the future.
In addition, Stitch Fix reported more than two million active clients, which include those who have made at least one purchase over the previous 12 months, with a repeat rate of 86 percent, up from 83 percent a year earlier.
The site’s 3,400 stylists use customer surveys, as well as data and their own judgment, to hand-pick recommended outfits that are shipped to customers so they can try them on in the comfort of their own homes. Customers then pay for what they want to keep and send the rest back in a prepaid envelope. The company charges a $20 styling fee for each box, which can be applied as a credit toward purchases.
Stitch Fix is “an entirely different experience than going on Amazon and searching for your own thing,” said Lisa Bougie, the head of Stitch Fix’s women’s business, in an April interview with The Wall Street Journal. “One-to-one personalization at scale is almost the antithesis of what Amazon offers.”
Stitch Fix, which will list its shares under the symbol “SFIX,” will sell Class A shares in the offering, which at one vote per share will have one-tenth the voting power of its existing Class B shares. This structure gives pre-IPO investors, officers and employees control over all matters requiring stockholder approval.
Owners of Class B shares include Baseline Ventures, Benchmark Capital and 34-year-old Stitch Fix founder Katrina Lake, who holds about 15 million Class B shares, or a 16.6 percent stake, before the IPO.