UPDATE: October 2, 2018: A person familiar with the acquisition told Recode Tuesday afternoon that Walmart will pay $100 million, roughly two and a half to three times Eloquii's annual revenue. An anonymous source also told CNBC it valued the company at $100 million and that other retailers had been interested in buying Eloquii during the process.
Walmart on Tuesday announced it has acquired online direct-to-consumer plus-sized brand Eloquii for an undisclosed amount. The deal is expected to close within the quarter, according to company materials provided to Retail Dive.
Eloquii CEO Mariah Chase, her executive team and all roughly 100 employees will continue to be based in Long Island City, New York, and Columbus, Ohio. Several executives will join Walmart's U.S. e-commerce organization and report to Andy Dunn, senior vice president of digital consumer brands at Walmart U.S. e-Commerce (who recently stepped down as Bonobos CEO).
The digital brand, founded in 2011 by the Limited and relaunched in 2014 as an independent brand, fits into Walmart's two-part acquisition strategy to acquire companies that enhance the assortment on Walmart.com and Jet.com, as well as acquire digital brands that offer different products and experiences. Eloquii offers "unique and differentiated" products similar to other Walmart digitally native brands ModCloth and Bonobos, the company said.
Walmart is eyeing a $21 billion market, and it's betting on Eloquii to capture it.
Since the acquisition of Jet.com in 2016, the retail powerhouse has steadily collected digitally native brands that resonate with younger, more urban (not to mention wealthier) customers.
"As the retail landscape evolves at light speed, we remain firm in our belief that it’s not just about selling brands, it’s also about building brands and customer relationships," Dunn said in comments shared with Retail Dive. "As such, we are laser-focused on developing a portfolio of direct to consumer brands with a unique assortment you can’t find anywhere else."
Going in on the plus-size market could be a boon for Walmart, considering the average American woman wears a size 14 or above, according to Plunkett Research. The women's plus-size market reached $21.4 billion in 2016 — less than half of its market potential to reach $46 billion, according to Coresight Research. But the segment is growing at a quicker pace than apparel sales overall. The market value for women's plus-size clothing rose 23% between 2012 and 2016, more than double the 9.9% growth for clothing overall, Coresight found.
"Today we stand in solidarity with her by acquiring a brand whose sole focus is to exceed her expectations," Dunn said, adding that addressing customer's request for fashion-forward styles is something Eloquii does well.
"What makes a digital brand great is how it converts a pain point in the market into a source of delight for the customer," he said.