The company declined to specify the price on the deal that closed Friday, saying only that it was in the same range as its previous two purchases of online businesses. Those were $51 million and $70 million.
Walmart is working hard to attract younger and more affluent shoppers, but winning over ModCloth’s devoted customers, fans of its vintage-inspired patterned dresses, inclusive sizing and community feel, may be a challenge. Many expressed their disappointment on social media when they heard talk of a deal with Walmart.
Bentonville, Arkansas-based Walmart said ModCloth will continue to operate as a stand-alone and complementary brand to its other e-commerce sites, and will bring experience and talent to strengthening the company’s fashion business aimed at millennials. Independent designers who sell on ModCloth’s site, it said, will gain the opportunity to expand their reach.
ModCloth CEO Matthew Kaness, his executive team and the company’s 300-plus employees will stay based in San Francisco, Los Angeles and Pittsburgh, and will join Walmart’s U.S. e-commerce retail organization.
Walmart spent more than $3 billion for upstart Jet.com last year and since then has purchased other smaller companies, including online footwear retailer ShoeBuy.com and the outdoor gear seller Moosejaw. Marc Lore, the founder of Jet.com who is now CEO of Walmart.com, said last month that the company was still looking for new startups to buy.
ModCloth, founded in 2002, has one physical store in Austin, Texas.