Just two and a half years after Walmart added ModCloth to its brand portfolio, the Bentonville giant is selling the women’s fashion and accessories retailer. Go Global Retail, a brand investment platform, is buying ModCloth for an undisclosed sum.
Under the deal, which is expected to close later this year, ModCloth will continue to operate out of its current operational setup. Go Global plans to invest in ModCloth’s digital capabilities, including greater use of AI and predictive analytics.
“We believe that together with current management, ModCloth has the ability to become a stronger player in the premium fashion market, nationally as well as internationally,” said Jeff Streader, Managing Director at Go Global in a statement. “Our team of experienced retail and brand practitioners will supplement existing management in areas of digital strategy, supply chain and operations,” added Go Global Managing Director Christian Feuer.
Rumors that Walmart was considering selling ModCloth have been floating since July, when Recode reported that Walmart’s U.S. e-Commerce division was projecting losses of more than $1 billion for the year. However, in Q2, Walmart reported a 37% increase in e-Commerce sales that contributed to a total revenue increase of 2.9% to $131.7 billion. In addition to its own Walmart.com site, the retailer owns digital native companies including Jet.com, Bonobos, Shoes.com and Eloquii, which Walmart acquired in October 2018.
Walmart may be looking to upgrade its fashion appeal with private label brands that it can sell both online and in its stores. In September the retailer revived the Scoop luxury fashion brand, and plans to have items with the Scoop label in stores by early 2020.
ModCloth was founded in 2002 as a digital-only retailer selling exclusive indie fashions and its own vintage-inspired line of apparel and accessories. Following its March 2017 acquisition by Walmart subsidiary Jet.com, ModCloth opened brick-and-mortar showrooms in New York City, San Francisco, Washington, D.C. and Austin, Texas.
“We believe that ModCloth’s strong brand equity positions it for growth in the future,” said Ashley Hubka, SVP of Corporate Strategy, Development and Partnerships at Walmart in a statement. “We feel good about the progress of ModCloth and believe that Go Global’s team and scale out strategy presents an attractive opportunity for the employees and customers of the beloved brand.”