Wal-Mart Stores Inc.’s acquisition of ModCloth became official Friday.
Terms of the deal were not disclosed, but a Wal-Mart spokesman tells Internet Retailer the purchase price was “along the lines of” the Moosejaw and ShoeBuy.com Inc. acquisitions. Wal-Mart, No. 4 in the Internet Retailer 2016 Top 500 Guide, paid $71 million for ShoeBuy (No. 101) in January and $51 million for Moosejaw (No. 261) last month.
Vintage-inspired apparel retailer ModCloth (No. 187) will remain an independent brand as part of the deal. CEO Matthew Kaness and his team of more than 300 employees will join Wal-Mart’s e-commerce team.
As with the Moosejaw acquisition, this deal appears to help Wal-Mart build relationships with the manufacturers ModCloth sells, as well as enable it to add e-commerce talent. Wal-Mart’s spokesman says “designers that sell on ModCloth who are interested in expanding their consumer reach will now have the opportunity to serve more customers through Jet.com and our other e-commerce sites.” He declined to elaborate further.
Whether ModCloth’s designers will want to sell via Walmart.com or Jet.com remains to be seen. Comments on social media about the acquisition, which had been reported as likely since mid-week, were largely negative Friday afternoon. On Twitter, some users accused ModCloth of “selling out” and said they won’t shop there anymore.
Gabe Winslow, senior vice president of media at digital and customer relationship management agency Ansira, says maintaining independence from Wal-Mart will be key if ModCloth wants to retain the bulk of its existing customer base.
“Wal-Mart and ModCloth attract a completely different consumer base,” he says. “If ModCloth is able to operate as its own [entity], sticking to their feminist fashion brand aesthetic, the acquisition should be seamless. If not, I sense trouble and a decline in sales.”
ModCloth co-founder Susan Gregg Koger writes in a blog post that the acquisition is “bittersweet” for her, but she feels as though joining the Wal-Mart team is what’s best for the company in the long run.
“This will give us the necessary resources and support that we need as a business to grow,” she writes. “Growth allows us to reach more women, grow our community, and amplify our message.”Favorite