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Walmart sells ModCloth just two years after buying it



Walmart sells the women's clothing company and online retailer ModCloth, just two years after acquiring it. The brand will now be part of the investment company Go Global Retail, although it will continue to operate independently.

"We expect them to continue in the same direction as before," said Christian Feuer, CEO of Go Global Retail, The Verge . “I don't think the customer will see a change. If they do, I hope they will be happy with what they see. "

Susan Gregg Koger started ModCloth in 2002 as an independent online fashion retailer. It was known for casting real people as models and being one of the first clothing brands to take the No-Photoshop promise.

When the company sold to Walmart in March 2017, many customers felt betrayed. "What I loved about ModCloth is that I knew that the clothes I bought there couldn't be found at Macy's and weren't worn by the masses," Connie Warner told The Los Angeles Times . Warner started a Facebook page with Boycott ModCloth to protest the store's new owners. "No more. I've unsubscribed from their emails. I refuse to shop at a store owned by Walmart."


A screenshot of ModCloth's shopping interface.

For Walmart, the deal was part of a larger strategy for to grow its e-commerce business in an effort to compete with Amazon. "When we acquired ModCloth, our primary focus was to build the range through our own, digitally-original brands," a spokesman for Walmart told The Verge. "Our strategy has been developed and our current focus is to build directly to consumer brands that we can utilize in an omni way. Like online grocery stores, we invest in areas where our omni capabilities and unique benefits put us in a position to win. "

If you didn't follow the" omni jargon ", Walmart will try to focus on products that play well in stores and online, and that makes sense – Walmart has dropped billions trying to compete with Amazon. While some of that money has paid off – online sales increased 40 percent last year in the United States – the e-commerce division is projecting losses of more than $ 1 billion this year.

Hours after the ModCloth deal was announced, the Wall Street Journal reported Walmart was also looking to sell its personal shopping brand Jetblack. The store service lets customers shop via text message and get their goods delivered within hours – but it lost a lot of money. "From the beginning of the summer, Jetblack lost about $ 15,000 per member annually," wrote the Wall Street Journal .

For ModCloth loyalists who jumped ship 2017, it may finally be time to come back. While Feuer plans to grow the brand in the US and abroad, he wants it to remain true to its roots. "We are all focused on ModCloth being a specialist retailer with a specific focus on women's fashion," he said.


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