Modcloth acquired by Walmart online e-commerce company
March 17, 2017 5:56 PM
Courtesy of ModCloth
Holiday party dresses from ModCloth.com.
Courtesy of ModCloth
ModCloth founder Susan Gregg Koger:
By Stephanie Ritenbaugh / Pittsburgh Post-Gazette
ModCloth, an independent online clothing retailer with roots in Pittsburgh, and Arkansas-based behemoth Walmart have confirmed that the two unlikely partners have tied the knot.
Modcloth has been acquired by e-commerce company Jet.com, which is owned by Walmart, in an all-cash deal.
Neither company would disclose the price tag for the deal, which closed Friday, but said it was along the same lines as Walmart’s two recent acquisitions.
Walmart bought online footwear retailer ShoeBuy.com for $70 million and the outdoor and gear seller Moosejaw for $51 million.
The company, an indie-darling known for vintage and quirky styles was founded in Pittsburgh in 2002 and later moved its headquarters to San Francisco. It has 350 employees across offices in San Francisco, Los Angeles and Pittsburgh.
“All three Modcloth offices will stay intact,” said Aire Plichta Reese, a Modcloth spokeswoman.
Like many retailers, Walmart has been fighting for a stake in online sales. Last year, it paid more than $3 billion for Jet.com, which Walmart said would “infuse Walmart with fresh ideas and expertise, as well as an attractive brand with proven appeal, especially with millennials, the first generation of true digital natives.” Since then, the company has bought two other online retailers.
A Walmart spokesman described the deal as Modcloth “joining our U.S. e-commerce organization (alongside Jet, Shoebuy, Moosejaw and Walmart.com).”
In a blog post on Friday, Susan Gregg Koger said 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.” Ms. Gregg Koger created the company in 2002 with fellow Carnegie Mellon University Eric Koger.
“And we can open more stores — in your hometown!,” she continued.
The digital-native retailer, which targets women between 18 and 35, has been touched by the overall downturn in retail and undergone rounds of layoffs.
ModCloth had been breaking into the brick-and-mortar space with its ModCloth IRL (in real life) Tour, with temporary storefronts set up in cities around the country. The tour included a stop in its hometown of Pittsburgh in September. ModCloth also operates one physical store in Austin, Texas.
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