INDIE E-TAILER MODCLOTH GOES MASS MARKET WITH A BUYOUT BY WALMART

In Retail News, What's New by Christine GalassoLeave a Comment

Modcloth, the indie e-tailer who built its name on vintage-inspired fashion and home items, is being bought out by the biggest mass market company worldwide: Walmart. News broke late last week and estimates put the deal in the $50 million to $75 million range.

From a business perspective, the deal makes sense for Modcloth, whose recent troubles have included financial difficulties, rounds of layoffs, unsuccessful store openings and investments from financial firms.

On the branding end, the e-commerce company has always enjoyed a quirky, feminist reputation and loyal customer base since it was started by husband and wife team Susan Gregg Koger and Eric Koger in 2002. Many are questioning its sale to a company whose rap sheet includes underpaying workers, among other charges, and fans took to social media to protest.

Still, the sale is moving ahead with Walmart hoping to capitalize on the brand’s indie roots and clientele. Modcloth will eventually be folded into its Jet.com subsidiary. A move consistent with Walmart’s recent foray into niche brands, buying Jet.com, Hayneedle.com, ShoeBuy.com, and most recently, Moosejaw over the last year.

It’s no surprise that not all the Walmart acquisitions have been embraced by conscious, millennial shoppers, and Modcloth may prove its hardest to integrate. With totally opposing business and social philosophies, only time will tell if Modcloth can survive under Walmart’s rule.

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