Walmart is selling online women's apparel business ModCloth, which it acquired in March 2017, to Go Global Retail, the companies announced Friday afternoon.
A Walmart spokesperson declined to comment on the terms of the deal.
A press release said Go Global Retail will invest primarily in building out ModCloth's website, as ModCloth operates as a freestanding and independent fashion brand. Go Global Retail, founded in 2011, is a brand investment platform that has worked with other apparel companies including VF Corp., Guess and Billabong, according to its website.
ModCloth was founded in 2002 as a trendy apparel business, selling its bright-colored sweaters and patterned dresses mainly online and targeting women ages 18 to 35. It's since opened a handful of stores where customers can try on items but inventory can't be taken home. Instead, they're able to order them, at no cost for shipping. ModCloth is also sold in Nordstrom.
For Walmart, its deal to buy ModCloth about two years ago was part of a bigger push to grow online, following its acquisition of Jet.com in 2016, where it also gained Marc Lore, who heads up Walmart's U.S. e-commerce business. The price tag of the ModCloth deal also wasn't disclosed at that time.
For the most part, Walmart has kept these younger and trendier brands — such as plus-size apparel brand Eloquii and men's apparel maker Bonobos — out of its own stores and off its website, so as not to dilute the way shoppers view them. Instead, it's used the deals to gain talent and to learn more about their customers.
But those acquisition efforts have recently stalled, with Walmart's e-commerce business losing money and some of its acquisitions, including ModCloth and Bonobos, remaining unprofitable, according to a report from Vox.
Instead, Lore and Bonobos co-founder Andy Dunn, who had played a key role in Walmart's string of start-up acquisitions, have both said Walmart plans to focus more on incubating its own brands for the foreseeable future. It launched a direct-to-consumer mattress brand called Allswell last year, for example.
Ashley Hubka, senior vice president of corporate strategy, development and partnerships at Walmart, said in a statement Friday: "We believe that ModCloth's strong brand equity positions it for growth in the future. We feel good about the progress at ModCloth and believe that Go Global's team and scale out strategy presents an attractive opportunity for the employees and customers of this beloved brand."
The companies said the deal is expected to close later this year.