In a move that speaks volumes about its approach to growth, Stitch Fix on Tuesday announced that on Aug. 1, President Elizabeth Spaulding will become CEO, replacing founder Katrina Lake.
Spaulding joined the company early last year from management consulting firm Bain & Co., where she was a partner. Her focus has been on growth, including inventory management, international expansion and developing "the next generation of consumer shopping experiences," the company said.
Lake will become the board's executive chairperson, according to a company press release. She will also remain an employee, focusing "on Stitch Fix's social impact efforts, in particular the intersection between sustainability and technology in apparel retail."
The choice of Spaulding to take over as CEO is hardly shocking. But it's a stark reminder that Stitch Fix is a tech company whose aim is to sell clothes by solving consumer pain points, rather than by creating fashion.
Shares fell after the announcement of Lake's departure, though many analysts took it in stride. "In our view, the succession announcement was not unexpected given the larger role Ms. Spaulding had been taking during the earnings calls," Deutsche Bank analysts said in emailed comments Wednesday.
Spaulding spent more than two decades at Bain, where "she helped lead digital transformations for market-leading companies across the consumer and technology sectors," in part through partnerships and mergers and acquisitions, per the press release.
Reliance on managers with business acumen rather than on merchants doesn't necessarily spell success for an apparel retailer, however. For example, some observers see that approach as ultimately the downfall at Gap, which once defined casual American fashion. Former CEO Art Peck, who spent 15 years at Gap and nearly five years as chief executive before his abrupt exit in late 2019, was at Boston Consulting Group for more than two decades before his arrival, according to his LinkedIn page.
Then again, Stitch Fix doesn't seem to have fashion ambitions exactly. While Spaulding, in a statement, noted the company's "deep commitment to bringing joy, inspiration and convenience to all of our clients around the world," its fulcrum has been the algorithms that its stylists employ to put together boxes of clothes for its subscribers. Increasingly — as Stitch Fix has devised more ways for its customers to shop directly on the site, providing suggestions based on past purchases and other data — humans are left out of the equation entirely.
Honing and scaling that is the key to growth, according to Spaulding, who noted a "seismic shift" in consumers' willingness to buy apparel online. "The opportunity that we have ahead of us at Stitch Fix is extraordinary, and grounded in Katrina's vision and last 10 years of building personalization at scale," she said.