ModCloth to Open First Store, Hire Fashion Director

After rounds of layoffs, the company is now in hiring mode, according to CEO Mathew Kaness.
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Dhani Mau
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After rounds of layoffs, the company is now in hiring mode, according to CEO Mathew Kaness.
A look from ModCloth's in-house line. Photo: ModCloth

A look from ModCloth's in-house line. Photo: ModCloth

ModCloth has come a long way since high school sweethearts Susan and Eric Koger started the retail site from the former's college dorm room in 2002. Most recently, it's gone head-first into expansion mode since bringing on Mathew Kaness, formerly the chief strategy officer of Urban Outfitters, as CEO in January.

Since Kaness came onboard, the company has dipped its toes into brick and mortar with an L.A. pop-up, and has launched a full-fledged in-house line and, with it, a San Francisco "fit shop" that will remain open through Labor Day. The company is not stopping there. According to Kaness, the privately held company saw $150 million in net revenue last year, up from about $100 million in 2012, and achieved profitability in all four quarters. (ModCloth did not share its 2013 sales figures.) The company also raised a round of financing this past June, and over the phone, Kaness spoke about what he plans to do next.

Namely, Kaness wants ModCloth to be known as more than a purveyor of retro fit-and-flare dresses. He says the company has already seen "exceptional growth" in its separates business and has also started introducing more modern silhouettes. Categories he sees demand for include intimates, pajamas, loungewear, bridal and even that buzzword of apparel categories, athleisure, as well as "quirky novelty items." He says we'll see a number of these categories launch in the next year.

He adds that ModCloth is in "hiring and recruiting mode" — good news a year after the company made headlines for multiple rounds of layoffs. It's hiring primarily in marketing, tech, finance and product design. Most intriguingly, Kaness says the company is close to hiring a fashion director. Co-founder Susan Koger currently leads the design team.

As for brick-and-mortar stores, Kaness says the response to the San Francisco fit shop has "emboldened us to go faster with the [brick-and-mortar] experimentation and finalizing our plan for that; as we look to 2016, we can start to think about when and where to launch our first permanent fit shop."

"We’ll have stores in a lot of locations nationally, not just regionally," he adds.

Given Kaness's experience with that other "indie" retailer, Urban Outfitters, we wouldn't be surprised to see ModCloth take a similar path. "I think the way you get big is by thinking and acting small," he says of how he plans to expand ModCloth while maintaining its twee indie spirit. "Our job in growing the business is to expand the size of our community by having our current customers advocate for us, making our retail more shoppable, making our social more engaging and making visuals more compelling."