Walmart is exploring selling ModCloth


Walmart Inc. is reportedly looking to sell ModCloth, the women’s apparel site it acquired two years ago, as it looks for ways to pare losses at its online business.

“I can confirm that Walmart has received outside interest from buyers for ModCloth,” the brand’s chief executive, Silvia Mazzucchelli, told Glossy magazine. “We are in the process of exploring potential opportunities.” Recode first reported that Walmart was considering a potential sale last month.

Representatives for Walmart didn’t immediately return requests for comment.

The world’s largest retailer acquired ModCloth in March 2017 to bring some much-needed pizzazz to the company’s stodgy apparel business, which for years didn’t venture far beyond basic items like T-shirts and underwear. Acquisitions of other online clothing retailers such as Bonobos and Eloquii followed, along with a partnership to sell Lord & Taylor’s products on Walmart’s website.


Founded in 2002 by Susan and Eric Koger, ModCloth began as a seller of vintage clothing, hawking items handpicked by Susan. The business grew into a $150-million retailer known for its whimsical dresses and quirky outfits for the retro girl, but it faltered in 2014 as struggling sales growth led to two rounds of layoffs. The founders stepped aside and hired Matt Kaness, a retail veteran, to help bring ModCloth into the mainstream. The brand dialed back its more outlandish offerings, hoping to appeal to a broader range of women, and began opening physical storefronts.

ModCloth was always an odd fit inside Walmart’s buttoned-down culture, and the business has seen a revolving door of senior managers. Mazzucchelli, who previously worked at American Apparel, is the brand’s third CEO in three years. Plans to open additional physical stores have been dialed back, Glossy reported.

Walmart’s online expansion has come at a cost to profitability, and losses at the U.S. e-commerce business could rise to about $1.7 billion this year from $1.4 billion in 2018, Morgan Stanley estimates. In recent weeks, the company has merged its subsidiary into its broader e-commerce unit, a signal that Walmart can just as easily reach urban millennials with its main shopping site.