Dive Brief:

• ModCloth launched a new online outlet store earlier in July to take advantage of the summer clearance season, according to the company.
• The launch — spearheaded by the Walmart-owned brand's merchandising, IT and marketing teams — came together quickly after the idea was hatched. Teams worked weekends to take advantage of the July clearance season, ModCloth Vice President of Marketing Sabina Weber and Vice President of Merchandising Mary Jimenez told Retail Dive in an email.
• Mod Outlet launched with around 1,600 SKUs culled from ModCloth's full-price inventory, with the aim of capturing buyers who like the brand but can't afford full-price items, as well as to clear overstock. Weber and Jimenez said many items sold out quickly, and in August the teams plan to return focus to ModCloth's full-price sales until the winter clearance season.

Dive Insight:

ModCloth opened its online outlet on July 7, without a formal announcement, though the brand pushed it out through its social media channels and through paid advertising. Marketing was one more goal of the project, along with clearing inventory and winning new shoppers. 

Weber and Jimenez told Retail Dive that the outlet "provides additional messaging opportunities for us which breaks up the cadence of our emails and social pushes."

While a permanent feature of ModCloth's e-commerce site, the outlet is set up primarily to take advantage of the end of summer and winter clearance periods. Weber and Jimenez said ModCloth will add more inventory incrementally through the year and ramp up again in December and January. 

The mostly online women's apparel brand is undergoing a leadership transition. Antonio Nieves announced in April he would step down from the CEO post, and Silvia Mazzucchelli recently moved over from American Apparel to lead ModCloth as its new chief. 

Since Walmart purchased the company in 2017, ModCloth has expanded from an online-only brand to include physical showroom-style "FitShops" in New York City, San Francisco, Washington, D.C. and Austin. Customers at the inventory-less shops can try on apparel and receive styling advice prior to purchasing.

After its acquisition, ModCloth was folded into Jet — Walmart's largest e-commerce acquisition to date — along with other hip digital brands such as Bonobos. But since then, Jet appears to have lost prominence within the organization, with Walmart nixing Jet's own top executive position. 

Recode reported earlier in July that Walmart's e-commerce operations were going through growing pains and faced a potential $1 billion loss. As the retail giant tries to rein in costs for its digital arm, ModCloth will likely go up for sale, according to the publication.