Wal-Mart Stores Inc.'s (WMT) subsidiary Jet.com Inc. is acquiring ModCloth, an online retailer of vintage women's clothing, according to media reports.
Jet.com was itself recently acquired by Wal-Mart as part of efforts to challenge Amazon's dominance in the e-commerce market. In September 2016, Wal-Mart completed its acquisition of Jet.com Inc. for $3 billion in cash.
Jet has been on an acquisition spree over the past year. Before its acquisition by Wal-Mart, Jet bought online furniture seller Hayneedle for $90 million.
In January 2017, Jet acquired ShoeBuy.Com, a Boston-based rival to Amazon subsidiary Zappos, for $70 million. The company later bought online outdoor retailer Moosejaw for about $51 million.
ModCloth was founded by high school sweethearts Susan Gregg Koger and Eric Koger in 2002, while they both were studying at Carnegie Mellon University. However, the two are no longer part of the company leadership.
ModCloth has since grown to over 350 employees across offices in San Francisco, Los Angeles, and Pittsburgh.
"We decided that the best opportunity for ModCloth to go forward is to be part of a larger organization," ModCloth CEO Matthew Kaness reportedly told employees on Wednesday morning.
ModCloth has been praised for making fashion accessible for women of all sizes and it has a loyal following of female shoppers. However, the company has struggled to make profits and did not succeed in its recent efforts to raise additional funding.
News of its acquisition by Wal-Mart is worrying fans of the indie retailer that the company's independent streak will come to an end. Some employees of ModCloth have also reportedly expressed concerns about lower pay and poor working conditions after its acquisition by Wal-Mart.
by RTT Staff Writer
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