Why ‘box fatigue’ may be hitting the apparel industry, Stitch Fix

After earning a master’s degree a decade ago, David Hill wanted to amp up his personal style and signed up for the Trunk Club, which promised to mail him boxes of clothing tailored to his tastes as often as he liked.

Hill would visit the company’s Chicago showroom to meet with a stylist and pick outfits he could wear to the office or for special occasions. The stylist helped him design a custom suit and sent handwritten notes to check how he was liking his clothes, turning Hill into a loyal customer.

Then the Covid-19 pandemic hit.

“At the beginning, they were trying to tell me to buy sweatpants and joggers,” he said.

But Hill, 41, no longer needed new clothes since he was working from home and barely going out, and he canceled his subscription.

Not that long ago, major retailers were scrambling to get in on the subscription craze sweeping the apparel industry. But then the pandemic upended daily routines and made shopping behaviors far less predictable. Now, some analysts and investors are questioning the appeal of these types of businesses and their ability to hold onto customers, who often sign up during a big life change but eventually lose interest.

After acquiring the Trunk Club in 2014, Nordstrom announced in May that it was winding down the business and focusing on its in-house personal styling services. Rockets of Awesome, which curates boxes of clothing for kids, started running low on funding early this year as it hunted for a buyer. Stitch Fix, one of the best-known services in the space, was gaining traction in the years leading up to the pandemic but is now losing money and subscribers.

The subscription business model was appealing to apparel companies because it offered a predictable revenue stream based on regular membership fees. But companies are realizing that squeezing profits out of the playbook is harder than they thought.