ModCloth, the indie women's apparel brand bought and sold by Walmart within a couple of years, has once again changed hands. E-commerce platform Nogin has purchased ModCloth from Go Global Retail for an undisclosed sum, according to a Nogin press release.
Go Global bought the pure-player from Walmart in 2019, with plans to reinvigorate it and expand internationally.
Nogin said it will retain about 55 ModCloth employees, including Mary Jimenez, who was chief marketing officer but will be named CEO. The brand will be based in Tustin, California, within its longtime Los Angeles area home, and customer service operations will remain at ModCloth's Pittsburgh call center.
ModCloth's quirky vibe, independent streak and loyal fan base seemed at risk when Walmart bought the online apparel brand in 2017. But that was all intact when Go Global snapped it up, according to the financial firm's founder and CEO, Jeff Streader.
"Our intentions are to buy retailers and make them profitable, but not by stripping away the brand," he said at the time. "We're not interested in flipping companies quickly."
The pandemic interfered, however. Dresses, a ModCloth forte, weren't selling as people worked from home and had nowhere to go. The resulting underperformance meant that Go Global Retail essentially lost the bet it made when it bought the company pre-COVID, according to Thomaï Serdari, professor of luxury marketing and branding at New York University's Stern School of Business.
"Go Global decided to sell it now, while the company has not lost much of its value and is still desirable for purchase and while making sure they don't lose their initial investment," she said by email. "Maybe the turnaround that they had intended was based on expansion and this is not a safe bet right now. Other turnaround firms may have the capital to take this on and devise a strategy that will maximize their profit."
Streader himself said much the same thing by email on Wednesday. "COVID hurt us. Women stopped wearing dresses, our legacy category. We could not convert to Lululemon type apparel because that's not true to the brand," he said.
Selling ModCloth wasn't planned, but when Nogin approached Go Global, it was a good opportunity for all involved, Streader said. He said that Go Global will now focus on revitalizing and expanding children's apparel retailer Janie and Jack, which it bought from Gap Inc. in March.
"We were approached by a buyer that desperately wanted to buy a brand, and they pressed us hard to buy MOD," he said. "I saw the same passion that we have and thought, OK, this would be a good home. It was hard to sell ModCloth because Go Global loves the brand. ModCloth will be in a good place. Nogin is a solid home."
Founded as "Branded Online," Nogin has provided commerce solutions to brands including Honeywell, Hurley, Bebe, Lululemon, True Religion, Yeezy and Charming Charlie, per its release. In a statement, Nogin CEO Jan-Christopher Nugent said the firm's abilities include "being able to get brands to be world class and profitable within 90 days of putting them on our platform."
"We are thrilled to free up ModCloth to focus on delivering great products and stories to the brand's community of passionate consumers, while staying true to its core values that champion female empowerment and inclusivity," Nugent also said.