Walmart is considering selling off Modcloth.
“I can confirm that Walmart has received outside interest from buyers for Modcloth,” Silvia Mazzucchelli, Modcloth’s CEO, told Glossy. “We are in the process of exploring potential opportunities.”
Walmart acquired the online indie and vintage-inspired women’s apparel retailer in March 2017 for somewhere between $50 million and $75 million. The deal was part of Walmart President and CEO of eCommerce Marc Lore’s plan to modernize the company’s portfolio while selling brands not found on rival Amazon.
But Los Angeles-based Modcloth has yet to turn a profit and has gone through three CEOs since early 2018. Mazzucchelli, who previously led the relaunch of American Apparel, took over in April. In addition, Vice President of Marketing Sabina Weber, also from American Apparel, came onboard.
“We’re three months in at a company that needed some serious love and energy, and we have fearlessly taken on some massive challenges – a lot of details played into that,” said Weber. “We knew we had to be bold and make some changes, because we have nothing to lose. In order to save [something], sometimes you have to be very brave, and that’s exactly what we’re doing.”
With that in mind, the company recently launched Mod Outlet, a standalone eCommerce site, but has called off plans to open more physical stores. Currently, there are four Modcloth locations in Los Angeles, New York City, Washington, D.C. and Austin.
“At the moment, we don’t have plans to expand and open new stores this year, because we are still tweaking and experimenting with the formula in the stores we currently have,” said Mazzucchelli. “We are learning we need to supplement [Fit Shops] with some in-the-moment gratification by selling some of our assortment in stores. Once we have the right formula, we will have a more comprehensive real estate strategy.”