Even before Wal-Mart Stores Inc. (NYSE: WMT) paid $3 billion for online retailer Jet.com last year, the acquired company had itself been in full acquisition mode. Since Wal-Mart’s acquisition, Jet.com has added two more retailers, ShoeBuy and outdoor apparel seller Moosejaw.
News website Jezebel reported Wednesday afternoon that Jet.com, through Wal-Mart, has acquired women’s fashion retailer ModCloth for an unspecified sum. The deal is expected to close Thursday and an announcement is scheduled to be announced Friday.
According to a report at Recode, the struggling retailer had been unable to raise additional capital and likely sold for around $80 million, roughly equal to the amount of venture capital ModCloth had raised since its founding in 2002.
When Wal-Mart acquired Jet.com last August, the world’s largest retailer said that it would retain the Jet brand in order to “continue to provide a unique and differentiated customer experience with a curated assortment.” ModCloth fits right into that mold.
ModCloth positions itself as a hip, quirky, independent retailer of “indie-inflected” clothes. The company might fit in with Jet.com or it might not. According to Jezebel, ModCloth CEO Matthew Kaness told employees:
I think there’s a lot of overlap culturally with what [Wal-Mart’s] about and what we’re about. I think over time this is going to become an incredible marriage.
Jezebel then noted, “In the recording we heard, employees in the room can be heard laughing in what sounds like disbelief.”
The deal is part of an attempt by Wal-Mart to gain market share from e-commerce giant Amazon.com Inc. (NASDAQ: AMZN), which has taken business from brick-and-mortar retailers.
Wal-Mart shares were down fractionally in Thursday’s premarket session, after closing at $70.58, down about 0.2%, on Wednesday. The stock’s 52-week range is $62.72 to $75.19. The 12-month consensus price target is $74.37.