E-commerce fashion site ModCloth’s co-founder Eric Koger is exiting his role as CEO, the company announced this morning. On January 19th, Mr. Koger, who has served as CEO since the startup’s founding in 2002, will give the position over to Matthew A. Kaness, previously the Chief Strategy Officer of Urban Outfitters. Koger will remain with the company as co-founder and help with the transition and new projects. His wife, Susan Koger, will remain in her current role of Chief Creative Officer, and will report to Matt going forward.
Kaness spent over seven years with Urban Outfitters, where he was the lead executive focused on growth and innovation, before joining ModCloth. He feels the ModCloth brand has carved out a desirable niche in the market that gives the company the potential to expand its reach by focusing foremost on the customer. With his experience, the team believes Kaness will be able to accelerate ModCloth’s growth, increase its distribution, and lead the evolution of the customer experience and product development.
“The existing team is very talented and the culture is highly innovative and creative. It’s exciting for me to lead such a company,” says Kaness.
Departing CEO Koger also offers his support in a company announcement out on Monday:
“We always knew the time would come when ModCloth would need the leadership of an experienced retail executive to take our well-loved brand into the future, expand our distribution, and lead the continued evolution of the customer experience. Susan and I have known and admired Matt for some time, appreciating his understanding of both the art and science of retail and building great brands. We were thrilled to find he shares our vision for ModCloth’s potential and are confident he is the best person to lead the organization ahead.”
We understand that both Eric and Susan voted alongside a unanimous board to hire Kaness, having realized that the company was in need of an experienced retail exec to take over.
ModCloth faced some challenges in 2014, which could have been, in part, the reason why it went for this change. The company was hit with a couple of rounds of layoffs last year, the most recent being in October, which saw around 40 or 50 let go. Earlier in July, the company had also laid off just under 15% of its workforce when 70 others had been laid off. ModCloth also relocated its operations, after being bought out of its lease on Brannan St. in San Francisco by Pinterest.
ModCloth saw little to no growth in 2014, and has reduced its engineering team to just over a half-dozen, one source said. (Update: ModCloth claims that saying it had “no growth” is inaccurate.)
The e-commerce company, which specializes in fashion from independent designers and its own private label apparel, has raised over $63 million in outside funding from investors including Accel Partners, Norwest Venture Partners, Floodgate, First Round, Harrison Metal, Great Oaks VC and others.
The company confirms that it shipped around 2 million orders in 2014. ModCloth is best known for its vintage-inspired dresses which retails for anywhere from $55 up to several hundred dollars, depending on style.
Image credits: ModCloth, Vetri Foundation
UPDATE, Employee Memo below
2015 is going to be an exciting year. Since I co-founded ModCloth with Susan twelve and a half years ago at the age of 18, the business has grown and evolved every year. Each year has been filled with new challenges, and 2015 is going to be no exception; but I also promise we’re going to learn from the mistakes of 2014 and put them behind us as quickly as possible.
I’ve thought a lot about the challenges and opportunities we have in front of us in 2015 and beyond – especially taking the business offline, and scaling the sourcing & production of our merchandise – and I’ve decided that it’s time to bring in a new CEO who has a depth of retail experience in these & other areas to help us navigate the road ahead more easily.
Behind the scenes Susan Koger and I, along with members of the executive team and the Board of Directors, have been interviewing candidates for the past few months. We\’re excited to announce that we’ve already picked my successor with the full support and unanimous vote of ModCloth’s investors and Board of Directors. His name is Matt Kaness, and he’ll start full time on January 19th in our SF office. Matt was one of the top executives at Urban Outfitters, Inc. over the last 7 years, and he has a wealth of experience from a long career in retail and branded apparel that’ll equip him to lead ModCloth and realize its full potential. I also think he’s a great person, and will be fun to work with :-)
Susan and I will host a series of team meetings tomorrow (Monday) to talk more about Matt and this upcoming change. Matt will then lead a series of town halls meetings in each location the week of the 19th, so you all can hear from him directly in the coming days: he’ll be in SF on Jan 19th, LA on Jan 20th, and Pgh on Jan 24th.
With Matt joining, my title will become simply: Co-Founder. My new mission will be to help get Matt up to speed, and set him up for success. I want to make this transition as successful as possible, so I’ll be helping out on the team & advising where I can add value for some time.
To start, Matt will commute from Yardley, PA until his wife Theresa and three children are able to relocate to SF this summer.
I’m very excited for Matt and for ModCloth, and think this is a great way to start the new year for all of us. Please join me in welcoming Matt!
P.S. sorry for the Sunday announcement, but we were trying to both a) keep things under wraps for PR, and b) make sure you heard from me before you saw anything in the press.