• Stores, online retailers hit by try-before-you-buy test
  • After Whole Foods deal, Amazon tackles online apparel sales

A week after upending the grocery business, Amazon.com Inc. is taking aim at fashion.

The e-commerce giant’s latest service, which lets consumers try on items at home before they buy them, prompted a slump in shares of Macy’s Inc. and Nordstrom Inc., as well as European online specialists Zalando SE, Boohoo.com Plc and Asos Plc. It was a rerun of what happened to supermarket shares when Amazon announced a $13.7 billion deal for Whole Foods Market Inc.

The Seattle giant’s Prime Wardrobe service, introduced Tuesday, is “another potential nail in the coffin for the department-store sector,” Wells Fargo analyst Ike Boruchow said in a note.

Amazon is ramping up its fashion offering after expanding its beachhead in physical retailing by gaining more than 400 Whole Foods stores. The move comes as apparel companies ranging from Ralph Lauren Corp. in the U.S. to Next Plc in the U.K. struggle to keep up with fickle consumers and online competition heats up with new investments by fashion chains like Inditex SA’s Zara and Hennes & Mauritz AB.

Amazon’s new service aims to eliminate one of the major drawbacks of online clothing shopping — the moment when customers realize they’ll never be able to squeeze into those new jeans that looked great on a website. Shoppers have been able to get around that hassle…