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January 26, 2021

A decade after starting a personal-shopping service out of her Cambridge apartment to give busy, working women an easier way to shop, Stitch Fix founder and CEO Katrina Lake’s fortune has swelled to $1.1 billion.

The company’s stock price has skyrocketed as shoppers flock online during the pandemic, looking for convenience and safety. The 38-year-old entrepreneur appeared on Forbes’ Richest Self-Made Women list in October with a net worth of $360 million. Shares have nearly tripled in the last three months, pushing Lake’s stake in the company, which is just over 10%, over the billion-dollar threshold. Combined with cash and other investments, Forbes estimates she is worth $1.1 billion, making her one of just 19 self-made women billionaires in the U.S., along with the likes of Oprah, Gap co-founder Doris Fisher and Facebook chief operating officer Sheryl Sandberg.

A company spokesperson declined to comment.

Stitch Fix, which leverages data science and human stylists to send personalized outfits in the mail, has been on a mission to win over customers at a time when a trip to the shopping mall sounds particularly unappealing. During the first several months of the pandemic, shoppers pulled back on spending and it struggled to fill orders while its warehouses were temporarily closed.

However, its latest results show a growing appetite for the service. Stitch Fix reported a blowout quarter in December, posting a surprise profit and a 10% increase in revenue to $490 million. It told investors that it was on track to deliver between 20% and 25% growth for the year ahead.

Stitch Fix, which sells mostly apparel, has worked quickly to add styles that are of interest to people spending significant time at home. For instance, its athleisure assortment has grown 150% as a per cent of its women's inventory. Its kids business, launched in 2018, has also taken off as parents turn to the service to pick up clothing for their growing children. During back-to-school season, orders for first-time customers were up 60% from the previous year.

Stitch Fix is seeing improvement in the number of happy customers, too. In the last two quarters, nearly 80% of new customers kept at least one item and decided to order a second box, a five-year high. Customers typically pay a $20 "styling fee" to receive a box of five personally curated items, then send back anything they don’t want. They pay the full price of any clothes they keep, minus the $20 fee.