ModCloth has started from day one as a womenswear site at the proposal of its two founders, Eric and Susan Gregg Koger. It was only in 2015 when the company decided to go in a brick-and-mortar style and open stores in Los Angeles and San Francisco. However, as of recently, the business went into the possession of Walmart. This was a strategic move in an effort to consolidate power through unique brands in the presence of tight competition.
Womenswear Site ModCloth Was Sold at a Price of up to $70 Million
On Friday, Walmart made womenswear sie ModCloth part of its extended portfolio of brands. There is no clear hint regarding the price of the transaction. However, the retail giant did specify that the deal was similar to its previous two purchases of such kind. This makes the new deal to belong in a range between $51 million and $70 million.
On the other hand, Koger will not leave the helm of the company so quickly. On the contrary, the new parent company will allow the family to continue their business as usual. The only difference in light of the recent event is that ModCloth will appear as a complementary brand to Walmart. Moreover, the ModCloth CEO Matthew Kaness, leading team, and 300 workers will continue to operate in San Francisco, Pittsburgh, and Los Angeles. They will also become part of the U.S. e-commerce retail organization of Walmart.
Walmart Gained Access to a New Target Audience
Through this new merger with the womenswear site, Walmart has actually acquired access to a new target public. The newly purchased brand connects the retail giant to Millennials that love vintage and indie inspirations. Walmart admitted that the appealing of ModCloth came from its wide online community, its close-knit relationship with customers, and its endorsement of inclusiveness. The brand is active in several body positivity campaigns.
Even though Walmart has managed to build a gigantesque empire, Amazon still succeeds to put its dominance in jeopardy. This is why Walmart wants to reach a wide variety of communities. The company figured out that the online world is the only viable way to do that. The web offers instant connections and the possibility to create a multitude of personas that are to the liking of different target audiences.
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