DEATH OF PUREPLAY RETAIL

INTELLIGENCE REPORT DEATH OF PUREPLAY RETAIL RETURN ON INVESTMENT

The New Path to Growth (Cont’d) While Birchbox’s business flourished throughout 2013 and 2014, ModCloth’s stagnated. The pureplay e-tailer saw flat revenue growth from 2013 to 2014, with sales hovering around $150 million. 63 In 2015, ModCloth shifted to a more omnichannel strategy, mimicking Birchbox’s path to growth. In January 2015, ModCloth hired former Urban Outfitters Chief Strategy Officer Matthew Kaness as CEO, and in the following months, Kaness transitioned the retailer’s focus from online to brick-and-mortar. In April 2015, ModCloth launched its first pop-up shop in two years. Two months later, the retailer announced its first funding round in three years and launched a “Fit Shop” in San Francisco.

In the three months that followed the Fit Shop’s launch, monthly visitors to the retailer’s website jumped from 1.6 million to 1.8 million. 64 The shop’s success prompted ModCloth to extend the store’s lease until the end of 2015, and in September 2015, Kaness announced that ModCloth had begun to look for a permanent brick-and-mortar location.

64. Compete.

63. Internet Retailer Top 500 E-Commerce Companies.

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Death of Pureplay Retail: ModCloth Brick-and-Mortar Initiatives January 2015—September 2015

January 2015

April 2015

June 2015

September 2015

“...as we look to 2016, we can start to think about when and where to launch our first permanent fit shop.”

Opens its first popup shop in two years in LA

Launches a “Fit Shop” in San Francisco and ultimately extends the shop through 2015

Hires new CEO Mathew Kaness, former Chief Strategy Officer at Urban Outfitters

1. ModCloth uses email to promote its Fit Shop, a popup store in San Francisco that remained open through the end of 2015.

Announces a $15 million funding round, its first in three years

Matthew Kaness -ModCloth CEO

Source: “ ModCloth to open first store, hire fashion directory ,” Fashionista, September 1, 2015. “ Can Physical Stores Turn ModCloth Around? ” Internet Retailer, August 10, 2015.

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January 12, 2016