Walmart has acquired Modcloth, an online women’s fashion retailer for an undisclosed amount. This move boosts Walmart’s e-commerce footprint. The goods of Modcloth will be sold on Jet.com which is owned by Walmart.
Walmart notes that this acquisition puts Walmart in a position to “gain the experience of a well-recognized specialty apparel e-commerce brand that’s trusted by millions of millennial women.” Walmart was also impressed by Modcloth’s strong social media presence and highly engaged community.
A spokesperson said that this acquisition was priced “along the same lines” as its two other previous acquisitions. In December 2016, Walmart bought Shoebuy for $70 million and last month it purchased Moosejaw, an outdoor apparel retailer, for $51 million.
This acquisition of Walmart is its fourth since September of 2016. It bought Jet.com for $3.3 billion. Walmart said that in online shopping, the number 1 category is apparel and accessories in which Modcloth is a brand leader in.
Walmart, in a statement, said, “As we continue to grow our e-commerce presence, Walmart has acquired the assets and operations of ModCloth, one of the top online specialty retailers of unique women’s fashion and accessories.” Walmart said that this acquisition is an opportunity for designers selling on ModCloth to expand their selling through other e-commerce sites of Walmart.
This acquisition cements Walmart’s strategy to acquire more online brands to help it branch out into new demographics, particularly the younger and hipper clientele which have no experience with Walmart.
Walmart CEO Doug McMillon said at a conference, “Assortment is driving a lot of these acquisitions. We can pick up some of these companies that are great in terms of the assortment and the service they provide, but they don’t have enough money to lose, to go market their brand and scale it.”
Modcloth will continue its operation as an independent website and brand. ModCloth has operations in San Francisco, Los Angeles, and Pittsburgh and has over 300 employees. It started in a college dorm room in 2002 by Susan Gregg Koger and Eric Koger.
Modcloth raised $78 million in its startup phase. Its investors include Norwest Venture Partners, Floodgate, First Round, and Accel Partners.
Modcloth targets women between 18 and 35 but has been affected recently by the industry downturn in retail and had to trim down its workforce to reduce expenses. It has gone through six rounds of layoffs. Modcloth branded its way to success by having a hip, quirky persona for smart, bookish girls.
Susan Gregg Koger, through a blog post, said that the deal “will give us the necessary resources and support that we need as a business to grow. Growth allows us to reach more women, grow our community and amplify our message. And we can open more stores- in your hometown!”
Modcloth is also known to be “Feminist AF” in its fashion sense. Its founder Susan Gregg Koger is vocal of workplace issues such as equal pay and equal representation.