As Walmart Faces $1 Billion E-Commerce Loss, Brand Considers Selling ModCloth

Although some brands and governmental agencies might be taking steps to reduce plastic consumption, Americans still manage to use a lot of it. From the equipment in homes and businesses created through the reaction injection molding process (wherein two liquid components are mixed and chemically cure inside a mold) to the plastic containers in which we keep our leftovers, there’s little doubt that we’re currently quite reliant on this material. Even the credit cards we use for everyday purchases are made of plastic — despite the fact that many of us are shopping online more than ever, we still need those numbers handy to place an order.

Last year, an estimated 1.8 billion people purchased goods online. And as e-commerce demand continues to grow, companies have to get creative and ensure they’re able to provide consistent website access to customers around the world. Mobile data centers have become more popular for this reason, and by using immersion data center cooling, these organizations can reduce sever energy by up to 20% and keep their bottom lines in mind. But while innovations like these ensure that consumers can shop anywhere, anytime while allowing companies to increase their own savings, those benefits don’t mean much if the customers aren’t buying from you to begin with.

That’s a problem Walmart is currently facing. The corporation is still doing well overall, bringing in roughly half a trillion dollars a year, but the bulk of that profit is thanks to its brick-and-mortar retail sales. It was recently announced that the brand’s e-commerce division is struggling — to the tune of a $1 billion projected loss for this year alone. The company has been living in Amazon’s shadow for years and is clearly still having problems catching up in the online retail world.

Walmart has made major moves to turn their e-commerce situation around, acquiring, ModCloth, Eloquii, Bononbos, Moosejaw, and others in the last couple of years. All of those purchases, which ranged from $50 million to $310 million in cost, were pushed for by Marc Lore, the president and CEO of Walmart’s e-commerce division and founder of Jet (which Walmart also acquired for $3.3 billion back in 2016).

But that optimism has taken a turn since then. While Walmart was initially enthralled about bringing on ModCloth’s indie, millennial-heavy customers through the acquisition, long-time fans of the brand expressed outrage on social media regarding its sale to Walmart — a company that stands in staunch opposition to what many feel the ModCloth brand stands for. Whatever the reasons, ModCloth underperformed this year and is not considered to be profitable for Walmart as yet (a classification also shared by Bonobos and Eloquii). Still, sources say that Walmart is considering selling off only the ModCloth brand and that the corporation isn’t likely to purchase any more e-commerce brands any time soon.

What the future holds for ModCloth is uncertain; although the size inclusive brand has a lot of potential, it has experienced its share of controversies — and whether there’s a buyer lined up is not known. But considering that Walmart might not have been the best fit for new ownership in the first place, some customers are hopeful that they’ll feel good about purchasing from ModCloth again once a new deal goes through. Until then, Walmart will reportedly focus on building up its own private labels. But whether Walmart will ever be able to truly compete with Amazon is rather unlikely.

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