Karmaloop made headlines earlier this year when it filed for Chapter 11 bankruptcy. However, for a company that was once the best in the streetwear, it's fall from the top was unexpected. The Boston Globe just wrote an illuminating piece that documents every mistake that led the company to where it is now.
The problems began with "ancillary sites that caused us to stray from the company’s core business," Karmaloop CEO Greg Selkoe told The Boston Globe. The company's attempts to launch the more high-end site Boylston Trading Co., a clothing subscription service, dubbed Monark Box, and the women's version of Karmaloop, MissKL.com, all backfired. "None were bad ideas, but it was too much too quick," Selkoe said. As much money as Karmaloop lost on these failed ventures, none were more detrimental to the company than its failed television project.
Karmaloop spent up to $14 million dollars, reports The Boston Globe, on a television channel that Selkoe hoped would be the next MTV. However, the channel never aired a single show or episode.
Due to this series of bad decisions, Karmaloop slid into debt and was unable to pay many of its vendors. Its bills added up to unsurmountable totals, including $586,352 owed to Huf, $313,695 owed to 10.Deep, and $156,919 to Vans.
While there were rumors that the company had been purchased by Dame Dash and Kanye West, court documents show that Karmaloop tried and failed to sell. Karmaloop attempted to broker a deal with over 150 potential buyers, according to The Boston Globe, but nothing was ever finalized.
The company will go up for auction next month, with a measly starting bid of $13 million dollars. Meanwhile, Selkoe remains determined to stay at the helm of a business by finding an investor. Hopefully, whoever does ends up steering the company makes some more sound decisions.