Yahoo Finance ModCloth Sold Again, This Time to Nogin
Nogin, a market leader in outsourced e-commerce for major fashion and consumer product companies, has acquired the assets of ModCloth, the online retailer of women’s fashion and accessories. The purchase price was not disclosed.
This marks the fourth chapter for ModCloth, which was founded in 2002 and specializes in vintage-inspired fashions, shoes, handbags and accessories for 18- to 35-year-old women.
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Nogin, based in Tustin, Calif., acquired the brand from Go Global Retail, which purchased it from Walmart Inc. in 2020. Walmart had bought the brand in 2017 from ModCloth founders Susan Gregg Koger and Eric Koger, (who had started the brand as students at Carnegie Mellon University,) as part of the discount retailer’s strategy to acquire digitally native brands to educate itself about next-generation e-commerce.
Over the years, Nogin has provided intelligent commerce solutions to major brands such as Honeywell, Hurley, Bebe, Lululemon, Justice, True Religion, Yeezy and most recently, Charming Charlie.
“We have a huge advantage of being able to get brands to be world-class and profitable within 90 days of putting them on our platform. It’s what we have always done. Investing where we see great potential is a natural extension,” said Jan-Christopher Nugent, Nogin’s chief executive officer. “We are thrilled to free up ModCloth to focus on delivering great products and stories to the brand’s community of passionate consumers, while staying true to its core values that champion female empowerment and inclusivity.”
Nogin plans to reinvigorate Modcloth’s e-commerce operations using its proprietary suite of Intelligent Commerce Solutions. The company’s platform allows brands to leverage advanced data analytics to grow their brand and sales. In addition to managing the entire digital operation, Nogin’s services include brand strategy, creative services, development, logistics and performance marketing.
Geoffrey Van Haeren, president and chief technology officer of Nogin, added, “We are truly excited to bring ModCloth into our fold. The shift to online is massive and we love delivering our intelligent commerce and innovations to brands that are not equipped for the unique demands of e-commerce. To date, this strategy has driven consistent exponential results.”
The company has retained about 55 ModCloth employees and kept the leadership constant, with chief marketing officer Mary Jimenez named CEO. She will be joined by members of the brand’s buying/brand/design/merchandising, logistics, tech/development/IT, accounting and HR teams, who will be based in Nogin’s Tustin headquarters, as well as customer service representatives in ModCloth’s Pittsburgh, Pa., call center.
Jeff Streader, managing partner with Go Global Retail, said, “ModCloth is an amazing brand poised for growth. We feel very good about the progress at ModCloth since our January 2020 acquisition of the brand from Walmart and are excited to see its momentum continue with Nogin.”
Back in 2019, just two years after Walmart bought ModCloth to help it expand and remake its digital presence, the mass retailer agreed to sell the brand to Go Global. Walmart had expanded ModCloth’s relationship with Nordstrom.
At the time of the sale, Streader said he expected ModCloth to expand in a number of ways with Go Global operations picking up more of the back end and the ModCloth team focusing on design and marketing. “We’re going to focus in on innovation in their digital strategy, inventing in social engagement and listening to our core consumer and responding with products that she wants,” said Streader at the time. The plan was for Go Global to invest in artificial intelligence and predictive analytics to rev up the ModCloth business, which was to be expanded to Europe and into China.
WWD reported in September that ModCloth had reopened in Europe and was going to begin a push in business in the region, reconnecting with customers online and courting new shoppers. Europe was an important market for ModCloth before it was purchased by Walmart in 2017. Walmart made a number of changes, including pulling out of Europe, but ultimately it wasn’t a good fit, and it was sold to Go Global. The changing of hands resulted in ModCloth closing its wholesale business and shuttering stores in New York; Austin, Tex.; San Francisco, and Washington, D.C., while zeroing in on its e-commerce business, which was good timing considering that the pandemic gave online sellers a boost.
In a telephone interview Wednesday, Nugent explained why he wanted to buy ModCloth and how sees it as a great fit.
“Our thesis has been helping brands really flourish online. It evolved from supporting as a service provider to then taking online licenses for some of the major brands and running them vertically. We now have a pretty good idea where we can take over the hard stuff with the technology and the R&D, and some of the e-commerce services that encumber really talented brands that keep them from being able to do what they do.”
He said ModCloth “has great brand DNA, a wonderful customer, it’s very timely and there were just a lot of things they weren’t able to do because they were encumbered.”
ModCloth is the first brand Nogin has acquired. “There was a whole world of opportunity that we had not been exposed to until we engaged and basically said we were ready to invest and start buying brands,” said Nugent.
“ModCloth for us is great, they’re actually doing quite well. They were just encumbered by technology limitations and capital limitations. There are things we do very naturally, that for them, was challenging. We know when we take a brand and put it on our platform, we can optimize those things. It frees up the talent to really push the brand and the product,” said Nugent.
When asked if Europe and China would be opportunities for ModCloth, he said, “We’re a global platform, so our platform has multi-currency, multi-lingual [opportunities], we have distribution partnerships in regions if we want to actually fulfill products out of those regions, rather than just shipping from the U.S. There’s a lot of opportunity.”
ModCloth, which presents a full range of sizes, offers free ModStylist services and collaborates with charitable organizations that advocate for women and animals. Its merchandise ranges from sportswear, dresses and swimwear, to footwear, accessories, home and gifts.
In Nugent’s opinion, “[ModCloth] really owns women’s empowerment, and diversity and being who you want to be.” He said the acquisition allows ModCloth to be externally focused on their customer and message, and Nogin can support the technology and development.
Nugent said they plan to hold on to ModCloth, after having had several owners, for a long time. “Yes. For them, they went through a transition to digitally native. For us, digitally native is very near and dear to what we do. We’ve always owned the online channel for brands. For us, this is what we do. We’re a very ‘long term with the brand’ business model.”
Based on their experience working with so many brands, Nugent said they know a lot about the female customer and how she behaves online. “We can see how certain customers behave across a plethora of brands and that gives us an ability to help. It’s sort of that marriage between the merchant with the technologist and the ability to translate, so we can do the hard things and the nerdy things and the tech things, and they can do the artistic, and brand and lifestyle things.” Nugent said they already put ModCloth on their platform even before the transaction was completed.
Tiger Finance provided a $6 million term loan to Nogin to help fund its purchase of the ModCloth assets from Go Global. Tiger Valuation Services is providing inventory analytics support.
“We are pleased to have been able to assist Nogin in its first acquisition of a consumer brand, as this fast-growing company looks to diversify beyond its traditional role of managing the e-commerce operations of major brands,” said Andrew Babcock, managing director of Tiger Finance. “This was a natural step in the company’s progression and provided the perfect opportunity for Nogin to step in and buy an established online retailer with a very loyal and passionate following.”
Nogin, which works with brands in fashion, consumer product goods, beauty, health and wellness industry, provides an e-commerce platform that includes research and development, sales optimization, and machine learning, along with artificial intelligence driven marketing and fulfillment.
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EXCLUSIVE: Go Global Inks Deal to Buy ModCloth From Walmart
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