Walmart to Buy Fashion Ecommerce Retailer ModCloth

ModCloth, founded in 2002 by Susan and Eric Koger and had raised short of $80 million in funding through the years, is being purchased by Walmart subsidiary Jet.com.

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The online retailer is known for its indie and vintage-inspired women’s fashion and has built a unique and enthusiastic customer base.

But ModCloth has struggled in recent years in expanding its business and even tried expansion into physical locations in San Francisco, L.A., and Austin.

While the initial results of its expansion strategy showed some success, the company was unable to gain additional outside funding to effectively continue this strategy.

Walmart has been picking up smaller online retailers in recent months, including Hayneedle, ShoeBuy and Moosejaw, all with significant niche market brand recognition.

These purchases of smaller online retailers come in addition to Walmart acquiring the startup Jet.com for $3 billion in August 2016.

Some long-time sellers may recognize a bit of a pattern here that resembles some of Amazon’s niche online retailer acquisitions such as Diapers.com and Zappos.

But Walmart’s reason for these purchases may be very different from Amazon’s purpose at the time.

The long game here for Walmart appears to be to gain consumers that may not be typical Walmart shoppers. Even with minor backlash from existing customers at these online retailers, Walmart will gain new to them consumers that it can share across its eCommerce properties.

Time will tell if this strategy will work out for Walmart, but one cannot discount that the company is making huge waves in eCommerce in its attempt to catch up to Amazon.

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