• 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 may also begin selling Nike shoes directly through its site, according to a person familiar with the situation. The prospect sent shoe-retailer stocks tumbling, with Foot Locker Inc. plunging as much as 11 percent, Finish Line Inc. 5.9 percent, and Dick’s Sporting Goods Inc. more than 9 percent on Wednesday. European sellers Sports Direct International Plc and JD Sports Fashion Plc were down less than 1 percent each in early trading Thursday.

Prime Wardrobe aims to eliminate one of the major drawbacks of online clothing shopping — the moment when customers realize they’ll…