On March 17th, Walmart put to rest the rumors surrounding its connection to ModCloth. The company confirmed that it has acquired the online womenswear retailer.
Earlier this week, rumors started emerging about a potential new Walmart acquisition. The retailer was linked to ModCloth, an online womenswear service. On Friday, the company put these rumors to rest as it confirmed them and offered some details on this e-commerce company’s position.
Walmart Acquired the ModCloth Assets and Operations
Walmart confirmed the news through a blog post on its official News page. ModCloth also posted a statement on the matter through a blog post. According to the former, the sales deal closed on March 17th. Financial details were somewhat lacking, as neither company revealed an acquisition price.
Still, Walmart confirmed that it acquired the online retailer’s assets and operations. These operate in both an on and offline environment. The retailer made this evident as it offered details on its latest acquisition.
As pointed out by Walmart, ModCloth is an online specialty retailer. It offers both clothing, handbags and accessories targeting women between 18 to 35 years old. Considered a top specialty site “with a strong social media presence”, the online retailer also operates a physical store. This is located in Austin, Texas. Interested customers can schedule individual appointments with the ModStylists.
Following the acquisition, ModCloth will continue operating as a standalone brand. It will continue both its online and physical store business. As such, it will be joining Walmart as a complementary brand to the company’s other e-commerce sites.
Nonetheless, Walmart stated that it will be relying on the ModCloth team. This will be bringing their “unique talents” and “significant experience”, which will be used in the U.S. e-commerce segment.
The ModCloth Team Will Remain Unchanged
Even following the acquisition, ModCloth’s CEO and executive team will remain the same. None of the company’s over 300 employees should be affected by the ownership change. The company will also continue to be based in its San Francisco, Los Angeles, and Pittsburgh offices.
This could help the online retailer. The fashion startup has been going through a difficult period. Following its early success, ModCloth had trouble in sustaining its growth. As this latter began to slow, the company had to turn to several rounds of layoffs and executive changes.
As it is, ModCloth’s co-founder released a statement on the acquisition. She stated that “I am excited to announce that we are joining the Jet.com and Walmart family.”
Jet.com is a Walmart subsidiary which reportedly helped move along the deal. Details on monetary transaction have not been offered besides Walmart’s stating that it was an “all-cash acquisition”. Sources close to the deal report that this may be somewhere in the $50 million to $75 million area.
The value would fit in with Walmart’s previous acquisitions. Previously, Walmart acquired ShoeBuy for $70 million and Moosejaw for $51 million, both in the same market domain.
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