Modcloth, a trendy Clothing Retailer, was just bought out by Walmart. It's part of a push on Walmart's part to grab smaller online brands to become more competitive with Amazon. The company didn't go into much detail about the price of the deal.
The deal was closed on Friday. Walmart said the price it paid for ModCloth was similar to two previous acquisitions of online businesses. One of those deals was worth $51 million and the other was worth $70 million.
Walmart trying to appeal to millennials
The purchase of ModCloth is another example of Walmart trying to attract younger shoppers.
ModCloth has a devoted customer-base. People love the site's inclusive sizing, dresses that were inspired by vintage, as well as the community feel. However, there were some people who took to social media to express how disappointed they were when they heard of Walmart buying ModCloth.
How ModCloth will operate
Walmart, based in Bentonville Arkansas, said ModCloth will serve as a complementary brand to the other e-commerce sites they own. The retail giant also said ModCloth will operate as a standalone. It also appears that independent designers that use ModCloth will have the chance to expand their reach, thanks to the acquisition.
Matthew Kaness, the CEO of ModCloth, will remain within the company.
The company's employees, over 300 of them, will remain in Los Angeles and San Francisco. They will also remain in Pittsburgh, Pennsylvania.
Past Acquisitions
In the past, Walmart has dropped some big money to acquire a number of online businesses. One of their most aggressive acquisitions was made last year. They purchased Jet.com for more than $3 billion.
Since then, the retailer has introduced a number of features to help them compete with Amazon.
Following the purchase of Jet, the company decided to purchase Shoebuy and Moosejaw, which has a loyal base of younger customers. Those acquisitions are other examples of Walmart doing what they can to increase digital sales and to expand their customer base.
