Go Global Retail, a brand investment platform for strategic investors founded in 2016 by fashion executive Jeff Streader, is set to acquire ModCloth from Walmart Inc., a transaction that’s expected to close by year end. While ModCloth won’t see any immediate operational changes, Go Global’s model allows it to enhance and expand the brand’s manufacturing capabilities.
That capability centers on Go Global’s two-pronged investment strategy. While there’s the usual handful of strategic investors comprised of family offices and small private equity firms, most of the investment capital flow stems from manufacturers across Asia, which have the added opportunity to also participate in the supply chain. This gives factory owners what Streader refers to as “committed production” for their factories.
The combined investment and participation in the supply chain gives factories skin in the game, and a reason to help build out the brand because as the brand equity rises, so too does their equity stake.
According to Streader, the structure also allows for brands under Go Global’s ownership to work with different investors, depending on who might be the right vendor partners for the individual brands.
ModCloth is Go Global’s inaugural investment, which is why it will be the initial guinea pig of this innovative supply chain format. But it likely won’t be the only brand that will help with testing and learning.
“Our platform is unlimited, not finite. We are in four other active processes right now, and will do one or two more investments this year,” said Streader, who’s looking to secure three deals a year on average. Streader said he’s focused on Western brands in fashion and retail, which could include categories in workwear, action sports, footwear, denim and beauty.
Though Streader is talking mostly to U.S. businesses now, he’s planning to grow Go Global by expanding to include European labels because most of the American brands are “limited in their ability to scale outside of the U.S.,” he explained.
In order for the model to work, prospects have to be able to scale up. And he’s checking to see if a brand that’s either underperforming or underdeveloped has a strong Facebook following or Instagram influencer network. “If a brand is out to pasture, there won’t be much life to it. We want equity in brands where we can develop a direct relationship with [the consumer],” Streader said.
Go Global has relationships with about 40 of the largest Asian manufacturers in all key product categories. At its heart, Go Global’s model is to streamline an integrated design and supply chain program for each brand under its portfolio oversight.
And while the factory owners are already using technology to help reduce cycle time by designing digitally, Go Global will invest in other digital capabilities such as artificial intelligence and predictive analytics so manufacturers can do a deep dive into what’s selling, what to produce, and what quantities are ideal for each size range.