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On Tuesday its shares jumped more than 10% on news it would begin selling children’s clothing before closing up $1.87, or 6%, to a record $32.99. As of June it had more than 2.7 million customers — up 30% from a year earlier. It reported nearly $9.5 million in profit in its most recent quarter, which ended April 28, a turnaround from the same period last year, when it was unprofitable. It has added new arms to its business too — in 2016, it started offering men’s clothing. On Tuesday, it announced a service catering to children who wear sizes 2T to 14, ranging in price from $10 to $35 per item. “What Stitch Fix has focused on that others haven’t as much is personalization, which is necessary for the survival of any subscription box,” said Lily Varon, an analyst at Forrester Research. The novelty of a subscription box — in which a customer pays for a company to ship them a mystery box of goods within a certain category, whether it’s makeup, fashion or food — wears off fast, Varon said. Which is why any subscription service that wants to succeed needs to also offer customers convenience, provide a product or service that customers frequently use, and have some kind of emotional component. Stitch Fix, Varon believes, has all three: People frequently buy clothes, it takes the hassle out of going to a store, and the comprehensive questionnaire new clients fill out makes customers feel that Stitch Fix’s personal stylists really know who they are. At signup, customers pay a $20 styling fee and fill out a lengthy questionnaire that asks about their size, shape, budget and style. Stitch Fix’s personal stylists and data scientists then compile and ship a box of five garments and accessories, based on the customer’s profile.
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