Walmart offloads its second e-fashion brand Eloquii to FullBeauty Brands

This marks Walmart's third divestiture of a direct-to-consumer brand this year, with the retailer selling Eloquii, a fashion brand sold online, to FullBeauty Brands.

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The retail giant sold Bonobos to WHP Global and Express earlier this month, and Moosejaw was offloaded to Dick's Sporting Goods back in February. This is a reversal of the strategy that Walmart carried out from 2017-18 under Marc Lore, Walmart's former head of e-commerce at the time.

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As reported in 2018, the retailer acquired a brand called Eloquii for a reported $100 million. Eloquii was one of many digital apparel brands with a niche consumer base and a loyal following. The objective was to expand the retailer's online product assortment by adding apparel and home products that would have a higher margin. Aside from bringing in talent, Walmart's acquisition of these companies could also enable it to accelerate its digital strategy in the coming years.

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"The move to add Eloquii to Walmart's portfolio of digitally native vertical brands allows Walmart to expand its Women's assortment in sizes 14+ and to offer a unique and differentiated product in a segment that is underserved yet growing," says Walmart spokesperson Jaeme Laczkowski. "Since Eloquii was acquired by Walmart, Walmart.com has grown to include hundreds of millions of items, and Walmart has decided it is time to sell Eloquii at a time when it is more advantageous."

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FullBeauty Brands is acquiring Eloquii and retaining its co-founder and brand leader, Julie Carnevale, with an undisclosed sum. In addition to Eloquii, FullBeauty Brands, which has 5 million active customers, also carries a portfolio of plus-size brands, including clothing, shoes, and swimwear. 

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"It is clear that Eloquii is highly data-driven, and that they have a great feedback loop into their business," as FullBeauty Brands CEO Jim Fogarty told Trade Algo in an interview. "There is a lot to be learned from [Eloquii] since it is very fast to market, and we are hoping to learn from it a little."

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For Fogarty, Eloquii will be part of FullBeauty Brands' "digital mall," which he refers to as the "fast fashion destination." FullBeauty Brands has sales of $1 billion annually, a small slice of the $81 billion market addressable to plus-size apparel as a whole. Among the company's goals is to gain a foothold with more millennials and Generation Z consumers, what he refers to as 'the more TikTok and Instagram generation'.

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Walmart acquired Eloquii and developed a new brand of inclusive apparel after the acquisition, which will continue to be sold by the retailer after the divestiture has been completed.

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There is a shift in Walmart's goals for its digital business from growing the number of available items to improving the financial health of the business, according to executives.

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At Walmart's investor day earlier this month, CEO Doug McMillon said that the company is now in a phase where the company's focus is less on scaling store pickup and delivery, eCommerce assortment, and eCommerce [fulfillment center] square footage, and more on improving operating margins and execution.

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The contributions Lore made to Walmart's e-commerce business, as well as its fulfillment operations, delivery options, and speed, resulted in a profound change when he left the retailer in 2021, where he had spent five years. With the help of his efforts, the number of products sold online has increased from 70 million in 1970 to "hundreds of millions" today.

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The online sales of Walmart for the most recent fiscal year-end had increased from 5% in 2019 to 13% as of the end of the fiscal year.

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Although there were a number of Lore-led businesses that were not successful in the end, there were also a number of businesses that were never successful as well, including JetBlack, a text message concierge service, as well as Jet.com, which was founded by Lore and eventually acquired by Walmart for $3.3 billion and brought Lore to Walmart as well.

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Aside from Eloquii, Bonobos, and Moosejaw, Walmart has also unloaded Modcloth, Bare Necessities, and ShoeBuy in recent years, all of them Lore-led acquisitions.