Rumors are currently swirling around Karmaloop like hungry vultures. You probably know about Karmaloop whether tangentially or maybe because you ordered a dope snapback from the site years ago. The affordable and accessible streetwear site established itself as a pioneer of online shopping, but since its glory days, Karmaloop has hit a rough patch that has currently left the company in somewhat of a limbo. The New York Post reported yesterday that the company is saddled with tons of debt—figures around $100 million have been mentioned and it filed for bankruptcy earlier this week. Customers are frustrated with delayed orders and CEO Greg Selkoe has taken to social media to address some of the issues. We reached out to Selkoe and spoke with him about what exactly is happening. His resounding message: Karmaloop isn't going anywhere. Also, those rumors about Damon Dash and Kanye West buying the brand aren't happening either.
Recently, Karmaloop was forced to shut down some of its side ventures, including Boylston Trading and women's line MissKL, which led to huge amounts of layoffs. But Selkoe tells Four Pins it isn't repeating the past: "When we closed those businesses down, we laid off a huge amount of people. But that was already a year ago. The staff’s the same. We’re not laying off staff or anything like that." In the wake of those shutdowns and other issues, the company built up debt. "I wanted to find some investors and money to get rid of the debt. But the fact is investors don’t like putting money to pay down debt. A lot of people say they love our business and want to be part of it, but we have to get rid of the debt. So we had to bite the bullet and do a restructuring," he says.
While going through this restructuring, Selkoe has plans to meet with investors. "I'm going to be out in LA talking to investors. But a lot of what I’m doing is going to be running the business. It’s not always the easiest way to deal with things. But I’ve been dealing so much with managing this debt and juggling payables and everything," Selkoe tells Four Pins. The company will take part in a 363 sale process and restructuring, which Selkoe deemed "bankruptcy light" and is working towards reorganizing its assets and making the business run better in general.
As for those delayed orders, Selkoe says they'll be fulfilled: "I feel terrible that there were held orders and delays. I got guarantees from the bank that 100% of the customers who had order issues are going to be taken care of. We're going to make it up to those people who had issues. We've been doing this for 15 years, I hope people won't judge us by one hiccup."
Meanwhile, once the company finishes with its plans to restructure, Selkoe aims to bring it closer to its roots. "We've been so promotional [with coupons and discount codes] because when you're cash poor and need cash quickly, you have to liquidate stuff," he says. "So we're going to push the brand back towards its roots of being more premium, doing less discounting on the main site and to really differentiate between PLNDR and Karmaloop. But the fact is we're not going anywhere. We're going to honor our commitments and the company is going to be better and stronger."
