It seems Karmaloop’s days are numbered. Following Dame Dash’s claims that he and Kanye West are set to acquire the company, reports surface that the once prominent online retailer has filed bankruptcy.
According to the Boston Globe, the company filed for Chapter 11 on Monday (March 23), due to millions in debt and poor business moves.
Despite the filining, founder Greg Selkoe says Karmaloop isn’t closing up shop.
“I hope people understand that Karmaloop is not going anywhere,” he told the paper. “We had a business that was being held back by the debt and it didn’t seem that we had any other solutions.”
Selkoe founded Karmaloop from the basement of his parents’ home 15 years ago. It would eventually grow into one of the mostly popular online retailers for streetwear.
However, attempts to branch out with a number of e-commerce sites and side businesses ultimately failed. One of the company’s most ambitious plans was for a niche cable network, which they were preparing to roll out with Pharrell. It never launched.
In 2011, Karmaloop reported earnings of $130 million, a 81% growth from the previous year, in which they earned $72 million.
In this week’s bankruptcy filing, the company listed $10 to $50 million in assets with up to $500 million in liabilities. Creditors include Insight Venture Partners and Google.
However, Selkoe tells the Globe that he’s received a $30 million loan commitment to support restructuring under the bankruptcy code.