Press commentary on direct-to-consumer brand’s growth linked to private equity firms. Read the full article.

On Walmart’s acquisition of digitally native brands:

Walmart has been in the private label scene for decades now. That it’s bringing back an older one isn’t necessarily surprising. But it does show that the money hemorrhaging strategy it adopted with the and Bonobos acquisition seems to be on its way out. “Walmart, like many other companies, became infatuated with this direct-to-consumer digital native craze,” said Richie Siegel, founder and lead analyst of the retail consultancy Loose Threads. This led to the “belief that a lot of interesting opportunities would come from outside the company.”

Walmart, over the last few years, spent billions of dollars over the last few years in an attempt to acquire competitive brands. The results haven’t been ideal. According to a report from Vox, ModCloth, which Walmart bought for reportedly around $50 million, is unprofitable, and Walmart is considering selling it. Similarly, other big purchases — like Bonobos, for $310 million and Eloquii, for $100 million — have yet to turn a profit.

Now, the company is making an about face. “I think they’ve gone through a few years of learnings,” said Siegel, “which has taken them back to where they were.”

Private labels are having a moment currently. Grocers have long been in the space, but large retailers like Target and Amazon have been upping their in-house brand game of late, in an attempt to make new brands that appeal to different audiences. Target’s latest private label brand, Good & Gather, for example, is an attempt to take on the high-quality food market. It’s aimed squarely at other successful food private labels like Whole Foods’s 365.

What Walmart seems to be realizing, explained Siegel, is that “private label works with the audience they have, not the audience they want.” For the last few years, its strategy has seemed almost aspirational — scooping up hot, scaling companies that cater to a hip and young demographic. Not anymore.

All the same, Walmart’s goal with private labels — no matter the department — is pretty clear cut. “A the end of the day, this is a very simple proposition: Can we build a more modern brand?” said Siegel. With that, all strategies may be beginning to align toward the move in-house.