SAN DIEGO, Sept. 02, 2022 (GLOBE NEWSWIRE) — The class: Law firm for shareholder rights Robbins LLP Reminds investors that a shareholder has filed a class action lawsuit on behalf of the Stitch Fix, Inc. buyers. SFIX Class A common stock between December 8, 2020 and March 8, 2022 for violating the Securities Exchange Act of 1934. Stitch Fix sells apparel, footwear and accessories through its website and mobile application.

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What is it about in this case: Stitch Fix, Inc. (SFIX) has misled investors regarding its business prospects

According to the complaint, Stitch Fix originally sold products as a “Fix” box, through which the customer received a monthly box of items selected by a personal stylist. The customer does not know exactly which items he has received, but has the option of returning the items he does not want.

On December 8, 2020, Stitch Fix launched the “Freestyle” program – a new direct purchase program that allowed customers to choose which items they would like to purchase from the start. Related to this announcement, Stitch Fix promoted the Freestyle program as a way to “expand our addressable market, deepen customer engagement and increase wallet share over time.” The company also stated that Freestyle would “serve as another catalyst as we acquire new customers, convert potential customers and reactivate expired customers”.

During class time, the defendants touted that the two programs were synergistic and repeatedly denied claims that the Freestyle program could cannibalize its old fix business. However, on December 7, 2021, Stitch Fix first admitted that the company had downplayed the extent of its transition from the subscription-based Fix model to the retail-based Freestyle model. Stitch Fix went on to admit that the company experienced some “short-term cannibalization” of new customers who decided to use the new Freestyle direct purchase option instead of the traditional Fix…