San Francisco’s ModCloth, Vintage Success, New World Acquisition

Small town memories are filled with mom and pop store purchases, warm conversations and special offers.

Not only did you see the business owners at the store, you most likely relaxed with them at town picnics, parades and casually at the park.

Often those memories are short lived and in the past because two things typically happen to towns and even when it is good news, it can be bad news for mom and pop operations.

The bad news is like so many communities in the Mid-West USA, at present, they are in economic decline and the small stores can’t survive and go out of business.

When the economic news is really good and the communities grow, larger retailers and companies come to town, grossly undercut the smaller enterprises and the mom and pop operations can’t match the lower prices and still go out of business.

There can be another option where the business name and owners can not only survive, they will thrive but the loyal long time customers frequently don’t like it. What scenario is that?

Mom and pop get bought out.

Stated another way, they get swallowed up.

Reporting over $150 million dollars in revenue in 2014, headquartered in San Francisco, ModCloth is an American online retailer of indie and vintage-inspired women’s clothing.

grapplingstars.com femcompetitor.com writer, modcloth.com photo credit

By virtually any standard that is substantial revenue especially when you visit their humble beginnings.

ModCloth was founded in 2002 by Susan Gregg Koger and Eric Koger. Both Susan and Eric were students at Carnegie Mellon University and launched ModCloth as an online website to sell used vintage dresses.

ModCloth grossed $18,000 in revenue in 2005.

At their once mom and pop home or perhaps more accurately modcloth.com dorm room, they share their history. “With a bevy of thrifted finds taking over her tiny dorm room, college student Susan Gregg Koger started an online shop in 2002 with help from her boyfriend-turned-husband, Eric. Since then, ModCloth has become a truly innovative and inclusive fashion retailer, with three offices across the country and hundreds of amazing employees.”

We have viewed video of Susan speaking and she is very down to earth and impressive. https://www.youtube.com/watch?v=ZR7mA1vAZX4

Susan explains the company’s marketing approach and vision very well. “ModCloth is democratizing women's clothing one cute outfit at a time! We welcome you to our wonderful world of women's vintage clothing, accessories, handbags, and shoes, where fresh floral patterns and daring designs flourish, and fun frocks spring into style. ModCloth provides an exciting and engaging online shopping experience for everyone in search of vintage women's fashion with fabulous flair. Whip up your wardrobe with pieces from hundreds of independent designers, including ModCloth branded fashion curated by our community.”

They have a great reputation in the community.

grapplingstars.com femcompetitor.com writer, modcloth.com photo credit

Here is what prnewswire.com adds, “ModCloth, the colorful lifestyle brand known for making vintage style modern, timeless and accessible to all through its celebration of unique, personal style, is spreading its mantra "you do you.”

Since their origins ModCloth has championed values of female empowerment and inclusivity. They’re dedicated to serving their global community of amazing women by celebrating their stories and offering a full range of sizes.

No wonder there is so much excitement about their brand.

ModCloth pop up shops carry a curated collection of ModCloth clothing, accessories and home decor, along with select pieces from local artists.

The innovative online retailer uses these pop-up stores to promote existing online and social media services such as Fit for Me and the Style Gallery

It appears ModCloth has everything you need to spice up your style.

Looking for figure-flattering plus sizes outfits? They believe fashion is for everyone’s size and shape.

grapplingstars.com femcompetitor.com writer, modcloth.com photo credit

With international shipping options, ModCloth is loved by customers all over the world.

Their global community is always growing, and they ship unique items from independent designers and cute clothiers to countries worldwide.

Whether you need shipping to Canada, the UK, Australia, or elsewhere, you can choose from multiple options with reasonable shipping rates for ModCloth international orders.

Transition is a part of life and while everything appeared to be heading into online heaven, in January 2015, ModCloth announced the appointment of Matthew A. Kaness as President, Chief Executive Officer & Director, replacing co-founder Eric Koger.

Mr. Kaness had previously held the role of chief strategy officer at Urban Outfitters, Inc., based in Philadelphia, where he led all corporate development for the firm since early 2007.

Under Mr. Kaness’s leadership, ModCloth launched its first ever namesake label as part of monthly collections starting in August 2015, and quickly became a multi-channel retailer when it opened its first pop-up Fit Shop in Los Angeles, followed by another in San Francisco.

That was big news but an even larger announcement was to come.

In March 2017, ModCloth was acquired by Jet.com, a subsidiary of Walmart.

Stated another way? It looks like another mom and pop was bought out.

On April 30, 2017, the informative news team at post-gazette.com shared. “Wal-Mart isn’t content being the largest retailer, a household name with sprawling supercenters dotting the country.

Last month, Wal-Mart’s Jet.com scooped up ModCloth, the quirky indie darling created in 2002 by two Carnegie Mellon University alumni, Susan Gregg Koger and Eric Koger.

The deal — the companies did not disclose financial terms but said the price tag was similar to two recent acquisitions of $50 million to $70 million — made for two unlikely partners.”

Jet.com is an American e-commerce company headquartered in Hoboken, New Jersey. The company was co-founded by entrepreneur Marc Lore (who had sold his previous company, Diapers.com, to Amazon.com) along with Mike Hanrahan and Nate Faust, and has raised $820 million over four venture rounds from firms including Google Ventures, Goldman Sachs, Bain Capital Ventures, Accel Partners, Alibaba Group, and Fidelity.

The site was publicly launched in July 2015. In Fall 2016, it became a subsidiary of Walmart

At their home jet.com speaks about who they are. “Our mission is to give customers like you a better, tailored shopping experience that fits seamlessly into your daily life.

An experience featuring a curated assortment of new and leading brands, because all in one place is better than all over the city.”

Sounds like a shrewd and formidable partner. Everything you need to continue to thrive and grow.

At ModCloth Susan announced the change to her loyal following. “Today, as you may have heard, marks a huge milestone for ModCloth. And with all big news comes change and lots of emotions.

For me, today is a bittersweet day. When I started ModCloth way back in 2002, in the summer between high school and college, I had big dreams. But I had no idea we would grow to become one of the largest independent online fashion retailers in the world.

Today marks the beginning of the next stage of ModCloth’s journey. I am excited to announce that we are joining the Jet.com and Walmart family. This will give us the necessary resources and support that we need as a business to grow. Growth allows us to reach more women, grow our community, and amplify our message. Our mission to help our customers feel like the best version of themselves continues. And our commitment to inclusivity continues. Our amazing team continues. And we can open more stores — in your hometown! I hope you will continue to join us as well on this next phase of our journey together.”

You would think that announcement would be met with excitement and encouragement by her customers but we were surprised at the response.

First of all there was over 300 comments.

That’s a lot.

Once we began to examine their comments we saw many were angry the clothes were being made in China and not America. The customers who responded we’re also vocal about the wrongful issues of child labor and the perception that Walmart exploits its employees.

Intriguing.

ModCloth appears to have faced the challenge that many once mom and pop operations faced.

To continue to grow they had to make some major decisions.

Though they’ve had layoffs in the past, fortunately they did not have to go out of business. It does appear that they became so successful that they caught the attention of the larger kid on the block.

Their story is one to continue to follow.

San Francisco is famous for being the home to companies, once small, who evolve and have a positive impact on the world.

With their clear vision, evident passion and strong desire for unique stylish clothes that can make every woman no matter what shape or size smile, bought out or not, we sense for ModCloth, the best is still yet to come.