Wal-Mart adds vintage vendor ModCloth to its growing collection of fashion-focused e-commerce sites


Wal-Mart is getting even more serious about fashion. The retailer is expected to announce Friday that is has bought ModCloth, an e-commerce site known for selling vintage clothing and its own line of apparel in a full range of sizes. The price of the deal was not available and the retailer did not reply to a request for comment.

Wal-Mart has been gaining style cred with a string of e-commerce purchases. The retailer in January bought Shoebuy, an apparel and accessories site for $70 million from IAC. The move was seen as a turning point for Wal-Mart in terms of fashion, and the deal was aimed at Amazon, since Shoebuy is a direct competitor of the Amazon-owned e-tailer Zappos.

Wal-Mart in February followed up its Shoebuy acquisition, paying $51 million for Moosejaw, a web site selling apparel and footwear with an outdoor focus. Hayneedle, a home furnishings and decor e-tailer is also part of Wal-Mart’s stable.


What the deals all have in common is that the e-commerce sites target more affluent shoppers than Wal-Mart’s typical customer. Shoebuy sells 800 brands, some including suede boots for $750 and Baffin parkas for $798.94. Moosejaw sells more than 400 brands such as Patagonia, The North Face, Marmot and Arc’teryx, as well as apparel for yoga, biking, skiing and swimming, among other sports., which Wal-Mart in August acquired for $3.3 billion, has facilitated and fueled the retail giant’s interest in fashion and upscale shoppers. Prior to the acquisition, the Bentonville, Ark., behemoth demurred when asked about its designs on fashion, pointing to its basics business., which adds 40,000 new shoppers each month and averages 25,000 orders a day, has also been seen as Wal-Mart’s attempt to tackle the online juggernaut that is Amazon.

“Jet attracts a more affluent, more urban and younger customer,” Doug McMillon, president and chief executive officer of Wal-Mart Stores Inc., said Tuesday at Bank of America Merrill Lynch Consumer and Retail Technology conference. “Some suppliers don’t want to sell on, but want to sell on Marc’s [Lore, president and ceo of Wal-Mart global e-commerce] has got some ideas of what Jet might be in future.”

McMillon explained that Wal-Mart’s recent e-commerce acquisitions have been driven by the web sites’ assortments. “It’s not very complicated; the customer wants great assortment, price and service, and we haven’t been delivering as well. [Moosejaw, Shoebuy and Hayneedle] are great, but they don’t have enough money to go market their brands and scale them. By joining Wal-Mart, they can make their products available through Wal-Mart and Jet and they can scale faster.”

Wal-Mart has aggressively grown its online Marketplace to 30 million stockkeeping units, making it the third-largest GMV retailer. “What we offer starts with the assortment,” McMillon said. The Marketplace offering has changed enormously with J.Mendel long dresses, $3,107.06; Stella McCartney coats, $2,095; Vionnet wrap skirts, $2,085; Moncler and Gamme Rouge jackets, Dolce & Gabbana cocktail dresses, and various Giorgio Armani styles.


Wal-Mart seems more eager to develop private-label brands. “We have resourced private brands,” McMillon said. “We have more talent there. We have footwear and apparel — and we’re investing in that.”

ModCloth, which has gone through two rounds of layoffs, may have found McMillon’s pitch about scaling faster, compelling. While the site’s sales reportedly reached $150 million by the end of 2015, ModCloth has been having a difficult time turning a profit.

Items on the site include a Hopes & Cheers shirtdress for $89; Work to Play A-line dress, $64.99; Eclectic Academic blazer, $119.99, and Whisker Takes All Arc’teryx denim jacket, $79.99.

ModCloth in 2002 was founded in a college dorm room by high school sweethearts Susan Gregg Koger and Eric Koger. The company has grown to 350 employees in San Francisco, Los Angeles and Pittsburgh. ModCloth sells its exclusive apparel collection in a full range of sizes, “because we believe fashion is for everyone,” its web site says.

The web site talks about its “community” and features extensive product ratings by consumers. Modstylists are available by phone to help with personal styling, bridal and wardrobing free of charge. The company operates a store in Austin, Tex., which it claims is designed to change the way women shop.


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