Shiekh Shoes, a footwear and apparel retailer, announced today that it has acquired Karmaloop.
"We saw great value in the deal as there is a tremendous amount of equity in the Karmaloop brand," Shiekh Shoes president Matt Fine told Complex. "We felt that there was an opportunity to leverage our core competencies to help Karmaloop reach its full potential." He adds that the acquirement will help Shiekh Shoes strengthen its e-commerce presence and existing portfolio. "This was a deal where 2+2 truly equaled 6."
Fine says he's had his eye on Karmaloop since the company filed for Chapter 11 bankruptcy in March 2013. He didn't pursue it then but later struck a deal with key stakeholders that was "advantageous for all involved."
Shiekh Shoes was founded by Shiekh Ellahi in 1992. In its 15 years, the retailer has grown to 100 stores—with locations in Washington, Oregon, California, Nevada, Arizona, New Mexico, Texas, Illinois, and Michigan—and is now the largest independent sneaker retailer on the West Coast.
At its prime, Karmaloop, which was founded by Greg Selkoe in his parents' basement, was the go-to online retailer for streetwear apparel. But after the accumulation of bad business decisions, alienating its consumers and brands, and failure to attract major investors, Karmaloop struggled to stay afloat.
Fine says, under Shiekh Shoes, Karmaloop will remain true to its core mission. "I think both entities that touched the business previously were instrumental in building the Karmaloop legacy. At its inception and in the years to follow, Karmaloop was engrained in the lives of its consumers and the destination to service their lifestyle. Karmaloop's troubles are well chronicled, but the past year has been about stablizing the business and delivering on Karmaloop's promise to consumer."