LAS VEGAS — Matt Kaness, CEO of women’s apparel site ModCloth, said the company will not deviate from its fundamental focus and ambitions after its acquisition earlier this month by Wal-Mart’s e-commerce arm Jet.
“Our strategy doesn’t change. We just go a lot faster,” Kaness said here Tuesday during an appearance at the Shoptalk 2017 retail conference. “[The acquisition means] we have more inventory purchases, more marketing spend and can open more physical locations. We have the capability to develop concepts and new [apparel] lines that address a much bigger audience. We have a bigger canvas we can paint on.”
Jet and ModCloth finalized the acquisition last week, with ModCloth co-founder Susan Gregg Koger confirming the deal on the site’s blog. Financial terms of the agreement were not disclosed. Kaness said Tuesday that it is still uncertain exactly how Jet will integrate ModCloth into Wal-Mart’s overall digital efforts.
“We’re still focused on the opportunity to scale our business, grow our community and amplify our message,” he said. “As time goes on, it will be easier to figure out where that intersects with Wal-Mart.”
Founded in 2002, ModCloth has developed a fervent audience over time, emphasizing retro fashion and vintage apparel, accessories, shoes and décor from a range of independent designers and artists. In addition to a growing brick-and-mortar presence encompassing pop-ups and “fit” stores in select cities, ModCloth further bolstered its following by catering to women of all sizes, most recently blurring the lines by retiring its “plus-size" label, instead settling on offering a range of "extended sizes."
ModCloth is the third apparel startup purchased by Jet in the first quarter of 2017, following recent deals for online shoe retailer ShoeBuy and outdoor apparel retailer Moosejaw. Wal-Mart acquired Jet itself for $3.3 billion last year in an effort to resuscitate its flagging e-commerce efforts, emphasizing digital innovation and product differentiation in an attempt to capture the much-coveted millennial consumer demographic.
Jet, led by e-commerce pioneer Marc Lore, is renowned for a signature pricing algorithm that rewards shoppers in real time with savings on items purchased and shipped together, in turn reducing supply chain and logistics costs. In the months since the Jet team joined the Wal-Mart ranks, Wal-Mart CEO Doug McMillon has ceded increasing control over the company’s digital efforts to Lore, who earlier this week announced the retail giant is launching Store No. 8, a Silicon Valley-based retail startup incubator designed to nurture and accelerate to market cutting-edge technologies including virtual reality, drone delivery and personalized shopping.
“This is a long-term [e-commerce] strategy Wal-Mart is embarking on,” Kaness said Tuesday. “As a startup that now has a back-end and resources and a balance sheet we didn’t have before, and to be part of something Marc Lore is building, is exciting.”