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Is Walmart Catering to Middle-America Millennials with Eloquii Acquisition?

In a seven-year span, Eloquii has moved from ownership under The Limited to a 2014 reincarnation as an independently run firm bringing a new point of view to full-figured fashion—a move fueled by customer demand following the brand’s short-lived shutdown.

Now, Eloquii is back under a larger corporate umbrella, with the news that Walmart Inc. is purchasing the plus-size fast-fashion label for an undisclosed sum in an effort to expand its reach with the 67 percent of U.S. women who wear a size 14 or larger.

The deal is expected to close by the end of the quarter, Walmart said.

Eloquii is but the latest in a string of takeovers that form the crux of Walmart’s growth-by-acquisition strategy that’s seen fellow digitally native brands Bonobos, ModCloth and MooseJaw snapped up in recent years. Though Walmart is perhaps the king of brick-and-mortar in the United States, bolting on digital-first brands—along with their “unique and differentiated” assortments—has been critical in helping the retailer establish the strong customer relationships for which direct-to-consumer brands are known.

With a Net Promoter Score hovering near 80, three-fold revenue growth since 2015 and core customers in the millennial-heavy 20- to 40-year-old sweet spot, Eloquii, and its laser focus on giving plus-size women curated, trendy styles tailored to their body types, has been a hit with shoppers. Since its rebirth, the brand has dropped numerous fashion-forward collections, collaborated with the likes of Reese Witherspoon’s Draper James and Stone Cold Fox, expanded beyond apparel into accessories and footwear, and debuted work-wear offerings in response to customer feedback.

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Walmart also has been in an all-out war to establish some new credibility as a fashion destination, angling to evolve beyond its reputation as a purveyor of low-priced staples. A litany of recent moves, including its online partnership with Lord & Taylor and the debut of numerous private-label apparel brands, indicates its seriousness to gain mindshare among consumers on the hunt for stylish new clothing even as archrival Amazon is poised to take the top spot among U.S. online apparel sellers this year. Amazon, too, is seeking to boost its profile in the fashion world, planning a new streaming reality series starring Project Runway alum Heidi Klum and Tim Gunn.

But Walmart’s real savvy is in targeting the traditionally underserved plus-size customer—and the synergy between Eloquii’s large-size focus and Walmart’s omnipresence in Middle America where waistlines tend to be wider, could prove a boost for the retailer.

Already, growth in the plus-size market is outpacing general women’s fashion, expanding at a 5.3% CAGR. That 3.6x growth rate is nothing to sneeze at when the market for clothing is challenged on many fronts. Walmart perhaps saw a plug-and-play opportunity to capture a large chunk of that $46 billion market, per Coresight Research data, while supercharging Eloquii’s growth, bringing operational prowess and large-scale sourcing and supply chain capabilities into the mix.

“As well, Walmart will also bring something to Eloquii that they haven’t had since The Limited divested the organization–physical stores,” said Jennifer Sherman, SVP of product and strategy for omnichannel commerce platform Kibo, noting that Eloquii operates five brick-and-mortar locations in Chicago; the Washington, D.C., area; Detroit; Houston; and Miami. “In an industry that has historically failed to focus on and cater to the unique body shapes that today’s women have, the option to buy online and pick up in store, and therefore verify the fit, is critical.”

Charles Dimov, VP of marketing for OrderDynamics, suggested Walmart should be selective with its in-store Eloquii assortment to drive customers from the web to physical stores.

“The opportunity in Walmart’s hands is to drive as many in-store pickups as possible,” Dimov said. “This leverages its geographic coverage and also means many of those pickups will result in more purchases: all good news in terms of raising Walmart’s sales.”

It remains to be seen whether Walmart will face a backlash from customers over the Eloquii deal, similar to the uproar among some consumers when it acquired ModCloth in 2017.

Walmart said Eloquii CEO Mariah Chase and her 100-strong team will remain in their Long Island City, N.Y., and Columbus, Ohio, offices, and report to Andy Dunn, SVP of digital consumer brands, as part of Walmart’s e-commerce business.