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Before streetwear was mass, there was Karmaloop, one of the mid-aughts most powerful streetwear entities. As recently as 2012, they were raking in $127 million in annual sales selling brands like 10.Deep, Vans, and Staple. And then, like in any great Greek tragedy, the company's hysterical grapple for power led to its ultimate its downfall. Well, that and its thirst for fame.
Unsatisfied with streetwear success, Karmaloop chased ambitious projects, like an entire cable channel called Karmaloop TV. In 2010, the company spent millions creating the channel—which Comcast never picked up—that plunged them into a hole from which they were unable to pay their vendors. In 2015, they filed for bankruptcy; public records show they owed $19 million.
Sheikh Shoes to the rescue! Today, the California-based company announced that it's acquired Karmaloop. "But why?" you might ask. "We saw value in the deal, between the brand name and the synergies alone we thought there was a big opportunity to do something positive with the business," Shiekh Shoes president Matt Fine told Racked over the phone. "Once we landed on the fact that there was equity in the brand, that was sort of secondary."
"The brand name is there, consumers are still following the brand," Fine says. He adds that the company was looking to bring a brand to its portfolio that could beef up its e-commerce capabilities and what's better than a brand that used to be one of the go-to sources for exactly these types of products?
The hurdles the company now faces is digging itself out from the Karmaloop's holes, the same ones former CEO Greg Selkoe found himself in. Former employees tell Complex that the blame for Karmaloop's downfall lands on Selkoe's "personal dream" of a television channel. Now, Shiekh Shoes is hoping that doing the equivalent of slapping an "under new management" sign on a once beloved brand will bring customers back into the fold.
Fine says that while he wants to keep the brand fresh, young, and exciting, "the Karmaloop TV thing as a standalone channel is not something I'm interested in today." Surely, music to potential vendors ears.
And Fine knows that keeping vendors and customers happy is tantamount to its future success. The first thing he does when I ask him how his Karmaloop will be different than the old version is laugh and tell me, "We pride ourselves on being very fiscally responsible with the business. For us, the first thing is making sure that the partners that we do business with are extremely comfortable that we're going to be around we're going to make sure they get paid."
His most direct answer succinctly clears up whether or not Selkoe will be involved in the company he founded. "At this time, there's no plan for that," he says
As for what Karmaloop will sell now, it wants to make sure it keeps the same fanbase but acknowledges that those people who were into streetwear brands printed with tons of logos have evolved past that; Karmaloop wants to move along with them. Fine also believes that a brand can no longer just sell clothes, so the new Karmaloop will offer lifestyle content that encompasses things like "sport, music, and art."
As for once rumored buyers Kanye West and Damon Dash, Fine says he hasn't had conversations with them, "but he would never rule out having influential personalities involved in the business." Who would?
So while Karmaloop has fallen for the siren song of bigger success in the past, the streetwear hero is still on its odyssey and Shiekh Shoes wants to help write the brand's redemption chapter.