ModCloth

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ModCloth
Subsidiary
Industry Retail, Apparel, e-commerce
Founded 2002 in Pittsburgh, Pennsylvania
Founder Eric Koger
Susan Gregg-Koger
Headquarters San Francisco, California, United States
Key people
Matthew Kaness (CEO)
Products Clothing, accessories, decor
Revenue $150 million+ (2014)[1]
Number of employees
350+[2]
Parent Jet.com (Walmart)
Website modcloth.com

ModCloth is an American online retailer of indie and vintage-inspired women’s clothing.[3] The company is headquartered in San Francisco[4] with an office in Los Angeles and a joint office/fulfillment center in Pittsburgh.[5]

History

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.[6] ModCloth grossed $18,000 in revenue in 2005, and received its first round of seed funding in 2008.[7] In 2009, ModCloth reported $15 million in revenue,[8] allowing them to relocate headquarters from Pittsburgh's Strip District to San Francisco.[9] ModCloth reported $100 million in revenue in 2012[10] and $150 million in 2014.[11]

In 2015, ModCloth became a multi-channel retailer when it opened its first pop-up Fit Shop in Los Angeles, followed by another in San Francisco.[12] ModCloth pop up shops carry a curated collection of ModCloth clothing and home decor, along with select pieces from local artists.[13] ModCloth uses these pop-up stores to promote existing online and social media services such as Fit for Me and the Style Gallery.[14] ModCloth will be opening pop-up stores in other cities as part of the 2016 “ModCloth IRL Tour”.[15] Cities expecting to see pop-up shops include Washington D.C., Portland, Austin, and Pittsburgh.[16] ModCloth plans to open permanent locations following these temporary store experiments.[17]

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

Jet.com noted ModCloth would run independently, similar to the arrangement in place for other companies they had acquired in the past.[18] Both the website and the retail store in Austin would be retained by ModCloth.[19] The partnership would give ModCloth more working capital,[18] the ability to open more physical locations,[20] and grow the business to reach more women.[21]

Though financial terms of the acquisition were not disclosed, the deal was estimated to be between $51 million to $75 million.[22]

Stance on body image

Truth in Advertising Act endorsement

In 2014, ModCloth became the first retailer to sign the Heroes Pledge For Advertisers.[23] As an endorser, ModCloth committed to not use Photoshop to “change the shape, size, proportion, color, and/or remove/enhance the physical features” of its advertising models in post-production.[24] In June 2016, ModCloth hosted an event on Capitol Hill to support the 2016 Truth in Advertising Act. Modcloth’s Susan Koger spoke at this event along with Representative Ileana Ros-Lehtinen[25] who was one of the introducers of the Act.[26]

Real people as models

In 2015, ModCloth began using staff members as models for its swimwear advertising campaigns.[27][28][29][30] ModCloth’s swimsuit campaign launched in response to research that correlated low self-esteem for women when exposed to thin models.[31]

Plus-size rebranding

In 2015, ModCloth removed the plus-size term from its site.[32] The company’s decision was supported by a ModCloth survey, which concluded that almost two-thirds of women were embarrassed to shop in a separate section for plus-labeled clothing.[33] The plus-size clothing was integrated into the greater site and made shoppable through size filters.[34] The “plus-size” label has also been replaced by “extended sizes”, which will also contain extra-small, petite, and tall clothing.[35]

Criticism

Acquisition by Wal-Mart Stores, Inc.

In March 2017, after ModCloth co-founder Susan Gregg Koger announced that company had been acquired by Jet.com (a subsidiary of Walmart),[36] many ModCloth customers expressed disappointment in online comments and social media. Some of the criticism related to concerns that ModCloth products would no longer be unique.[37] ModCloth has stressed that it remains largely independent and that its product quality will not be negatively impacted.[38]

Still other criticisms focused on Walmart's history of controversial business, employment, and supply chain practices.[39][37] ModCloth has not responded to these specific concerns, but emphasizes the brand will continue to focus on inclusivity.[39]

Philanthropy

On March 5, 2012, ModCloth announced a donation of dresses to The Princess Project. For every dress purchased from its Fancy Frocks collection that day, ModCloth would donate a dress to the non-profit.[40][41]

In 2015, ModCloth began its partnership with Schoola to raise money for Malala Yousafzai’s Malala Fund, which advocates and supports education for young women.[42] ModCloth participates in the cause by donating clothing which Schoola sells for a discount. The proceeds are then donated to the Malala Fund.[43]

References

  1. ^ "ModCloth Plans Huge Expansions Under New CEO". Bloomberg. Retrieved May 27, 2016. 
  2. ^ "ModCloth goes from clicks to bricks with S.F. pop-up". SF Gate. Retrieved May 27, 2016. 
  3. ^ "About Us". ModCloth. Retrieved May 27, 2016. 
  4. ^ "Company Overview of ModCloth, Inc". Bloomberg. Retrieved May 27, 2016. 
  5. ^ "ModCloth Overview". Crunchbase. Retrieved May 27, 2016. 
  6. ^ "How ModCloth Went From a College Dorm to $100 Million a Year". Mashable.com. Retrieved May 27, 2016. 
  7. ^ "Susan and Eric Koger: Modcloth". New Venturist. Retrieved May 27, 2016. 
  8. ^ "ModCloth, Now With Over $100 Million In Annual Revenue, Is Going Mobile First". Tech Crunch. Retrieved May 27, 2016. 
  9. ^ "Retailer ModCloth credits Pittsburgh team for company growth". Pittsburgh Post Gazette. Retrieved May 27, 2016. 
  10. ^ "ModCloth's 2012 ends shipping 1.2m orders, now with 1,200 featured designers, holiday requests up 52%". TheNextWeb.com. Retrieved May 27, 2016. 
  11. ^ "ModCloth Plans Huge Expansion Under New CEO". Bloomberg. Retrieved May 27, 2016. 
  12. ^ Bilis, Madeline (4 August 2015). "Online retailer ModCloth models new brick-and-mortar concept near Union Square". San Francisco Business Times. Retrieved May 27, 2016. 
  13. ^ "Wildly popular online shop pops up in Austin's trendiest district — for a limited time". Culture Map. Retrieved May 27, 2016. 
  14. ^ McCarthy, Allison (22 October 2015). "ModCloth's first brick-and-mortar a good fit in S.F". San Francisco Chronicle. Retrieved 12 July 2016. 
  15. ^ "ModCloth IRL Tour". ModCloth. Retrieved May 27, 2016. 
  16. ^ "ModCloth Names New Chief Technology Officer". Apparel News. Retrieved May 27, 2016. 
  17. ^ "Online retailer ModCloth models new brick-and-mortar concept near Union Square". San Francisco Business Times. Retrieved May 27, 2016. 
  18. ^ a b Fernandez, Chantal (24 March 2017). "Can Jet.com Take a Bite Out of Amazon Fashion?". The Business of Fashion. Retrieved 3 April 2017. 
  19. ^ Hinchilffe, Emma (17 March 2017). "Walmart continues battle against Amazon with acquisition of ModCloth". Mashable. Retrieved 3 April 2017. 
  20. ^ Ankeny, Jason (22 March 2017). "ModCloth CEO: 'Our strategy doesn't change' after Wal-Mart deal". Retail Dive. Retrieved 3 April 2017. 
  21. ^ Edelson, Sharon (20 March 2017). "Wal-Mart's Aggressive Fashion Push Continues With ModCloth Deal". Women’s Wear Daily. Retrieved 3 April 2017. 
  22. ^ Associated Press (18 March 2017). "Walmart buys online clothing seller ModCloth". USA Today. Retrieved 3 April 2017. 
  23. ^ "ModCloth Is First Retailer To Sign Anti-Photoshop Pledge". Forbes. Retrieved May 27, 2016. 
  24. ^ "ModCloth Signs Pledge to Avoid Retouching Photos of its Models Photoshopped images will get 'Truth in Advertising' labels". AdWeek. Retrieved May 27, 2016. 
  25. ^ "Modcloth goes to D.C. to support the Truth in Advertising Act". Fast Company. 16 June 2016. Retrieved 24 June 2016. 
  26. ^ "Here's the Truth in Advertising Act of 2016". Ad Age. 8 February 2016. Retrieved 24 June 2016. 
  27. ^ Feldman, Jamie (19 February 2015). "Modcloth Goes One Step Further And Puts Its Employees In Swimsuit Photo Shoot". The Huffington Post. Retrieved 24 June 2016. 
  28. ^ Stern, Carly (27 April 2016). "Fashion label ModCloth ask its own STAFF to model swimwear alongside body-positive campaigners in powerful new ad to prove all shapes and sizes are beautiful". Daily Mail. Retrieved 24 June 2016. 
  29. ^ Feldman, Jamie (28 April 2016). "Modcloth's Latest Body-Positive Swim Shoot Is Its Best Yet". The Huffington Post. Retrieved 24 June 2016. 
  30. ^ Murray, Rheana (3 May 2016). "ModCloth proves we all have swimsuit bodies with new body-positive campaign". Today. Retrieved 24 June 2016. 
  31. ^ Davies, Anna. "Clothing Brand Uses Ph.D. Candidates as Models". Shape. Retrieved 12 July 2016. 
  32. ^ "#StyleForAll: We're Retiring the "Plus"". ModCloth. Retrieved May 27, 2016. 
  33. ^ "ModCloth Does Away With Its Plus-Size Section". Racked. Retrieved May 27, 2016. 
  34. ^ "How to Find Styles That Are Just Your Size". ModCloth. 20 June 2016. Retrieved 24 June 2016. >
  35. ^ "ModCloth Plus Size". The American Genius. Retrieved May 27, 2016. 
  36. ^ "A message from ModCloth co-founder, Susan Gregg Koger". ModCloth Blog. March 17, 2017. 
  37. ^ a b Cheng, Nicholas (August 17, 2017). "Wal-mart is buying trendy e-commerce cites. The cool kids are not having it". Los Angeles Times. Retrieved October 12, 2017. 
  38. ^ Segran, Elizabeth (July 26, 2017). "This is ModCloth's plan to win over customers after the Walmart acquisition". Fast Company. Retrieved October 12, 2017. 
  39. ^ a b Luu, Christopher (March 19, 2017). "ModCloth confirms Walmart sale & faces customer concerns". Refinery29. Retrieved October 12, 2017. 
  40. ^ "HelpModCloth Donate Prom Dresses!". Seventeen. 5 March 2012. Retrieved 24 June 2016. 
  41. ^ "Prom For All!". ModCloth. 5 March 2012. Retrieved 24 June 2016. 
  42. ^ "ModCloth & Schoola Team Up To Support The Malala Fund, How you Can Support The Cause". Bustle.com. Retrieved May 27, 2016. 
  43. ^ "About the Malala Fund". Malala Fund. Retrieved May 27, 2016. 
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