The age of Mark Lore is over at Walmart. For a while, Walmart’s management was agog to attract millennial customers through specialized retail platforms and a unique approach as they thought such targeted initiatives would be needed to appeal to this audience. It sounded great on paper, but it did not pay off since most of the companies were not profitable and did not contribute to the bottom line.
So, Walmart said good-bye to ModCloth, Bare Necessities, and Shoes.com and their unprofitable results. Bonobos and Eloquii were also to be sold; they may still be unprofitable but are getting a second chance to grow and contribute to the profits of the company. Walmart’s huge size makes it difficult for small companies to make their mark, and the strong sponsorship that Mark Lore gave these conceptual companies is gone. Jet.com was folded into Walmart.com
when Lore left. So, it is difficult for these small companies to have a supporting voice with management attention focused on the enormous core business.
ModCloth was acquired in 2017 and sold in 2019 to Go Global Retail, and the company continues to operate under the same organization structure as during Walmart days. It was founded in 2002 by Susan and Eric Koger and is best known for its vintage apparel for women 18 to 35 years old. It is striving to be a strong player in the premium market.
Bare Necessities was established in 1998, purchased by Walmart in 2018, and sold in 2020 to Delta Galil. It offers an on-line assortment of 6,400 styles of intimates, women’s swimwear, shapewear, lingerie, sleepwear, hosiery, and most recently added denims. Delta Galil also markets and sells branded denim and apparel including 7 for All Mankind, Splendid, and Ella Moss. A good fit.
Shoes.com was formed in 1999 as Shoebuy, and was a pioneer in online shoe retailing. The company was acquired by Walmart in 2017 and sold in October 2020 to CriticalPointCapital, a private equity firm. John Foristall, President and CEO of Shoes.com, looks to CriticalPointCapital for its knowledge and expertise in brand relationship management to add to the company’s growth.
Here are three companies that were divested and will grow under the knowledgeable leadership of the new owners. At the same time, Walmart is now more realistic about its strength and where it can grow. Certainly, the most recent initiatives are applaudable and reassuring. The company’s main thrust is its supercenters, and management has strengthened that source of income.