In a bid to grow its e-commerce presence, Wal-Mart Stores Inc (NYSE:WMT) has acquired ModCloth, an online specialty retailer.
Under the terms of the deal which was closed March 17, the retail giant has bought the assets and operations of ModCloth.
ModCloth is an online specialty retailer that offers designs and exclusive fashion for 18-35-year-old women. It also operates a physical store in Austin, Texas.
Founded in 2002 in Pittsburgh, ModCloth has been headquartered in San Francisco since 2009. It also has offices in Los Angeles and Pittsburgh.
The online specialty retailer offers thousands of clothing and accessory items including its own private label apparel.
“The ModCloth team will continue to operate its site and store as a standalone and complementary brand to our other e-commerce sites. The ModCloth team will bring their significant experience and unique talents to our U.S. e-commerce efforts and will further strengthen the collective capabilities of the overall team,” Wal-Mart said in a statement.
ModCloth CEO Matthew Kaness, his executive team, and over 300 employees will join Wal-Mart’s U.S. e-commerce retail organization. They will continue to be based in San Francisco, Los Angeles and Pittsburgh, according to Wal-Mart.
Wal-Mart Betting on E-Commerce Business
Wal-Mart is betting big on e-commerce business in a bid to compete with Amazon.
During the fourth quarter of fiscal 2016, Wal-Mart reported a 29% year-over-year increase in its U.S. online sales.
Last year, the retail giant made two major moves: expanding its online grocery business and the acquisition of Jet.com, according to a report from The Motley Fool.
Wal-Mart expanded its online grocery business in 2016. The service allows customers to place an order online for grocery items as well as general merchandise, and pick it up curbside at a Wal-Mart store, without any charges. The Wal-Mart online grocery service is now available in various cities across 31 states.
Its second major move was acquiring Jet.com for $3.3 billion. Launched in 2015, Jet.com has an innovative shopping technology. Its “smart cart” delivers savings to customers based on how much they buy.
The total e-commerce sales in the U.S. rose 15.1% in 2016, versus the 2.9% growth in total retail sales, according to the Department of Commerce.