The article The Rise and Fall of Karmaloop is an intriguing insight into the world that was Karmaloop and the reasons behind its fall from being one of the worlds biggest streetwear retailers to an industry pariah.
Karmaloop’s story is one of big highs and unexpected lows, following its establishment by founder Greg Selkoe in 1999, the company became a pioneer of online streetwear sales, eventually becoming a cultural hub and recording yearly sales of over $100 million.
All good things must come to an end and earlier this year the company filed for chapter 11 bankruptcy. In its filing, the company said its debts ranged from between $100 million to $500 million, which surprised fans and many in the e-commerce community.
Writer Adam Caparell explains that the speed of its demise was mostly due to bad investments by Selkoe. One major investment was Karmaloop TV, which Selkoe dreamed of becoming this generation’s MTV. He hired former AMC TV executive Katie McEnroe to begin production and appointed Pharrell Williams as creative director in May 2011. Selkoe and Karmaloop ended up spending $14 million on the unsuccessful project.
Also in 2011 the company began four new niche websites; Boylston Trading Co., Miss KL, Monark Box and —. Each had their own team of employees and, eventually, low sales led to costs rising significantly.
“You could cite a million reasons why those businesses didn’t work. It was just a weird thing,” said Selkoe. “Before we knew it, we got ourselves in a hole. We closed one site after another, after another. It just wasn’t fast enough. The debts were mounting.”
In late 2014, things took a turn for the worse—Karmaloop could no longer afford to buy from its suppliers and things went downhill quickly. Suddenly consumers weren’t receiving orders and the company had become notoriously unreliable.
Following the company’s bankruptcy filing, a capital investment firm bought the company and Selkoe renounced his position as CEO. Selkoe hopes to be able to work on new projects and Karmaloop is still trying to earn back its reputation as the biggest guys in the business.
You can read the full article over on complex.com
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