Is Kanye West Buying Karmaloop?
Is Kanye West buying the Boston-based streetwear company Karmaloop? And if so, why?
All are reasonable questions you might be asking yourself after a perusal of this week’s business news. Karmaloop, founded in a basement in 2000 by entrepreneurs Greg and Dina Selkoe, filed for Chapter 11 bankruptcy after its attempted expansion into other commerce sites left it burdened with too much debt. At its core, Karmaloop’s site provides an online store for urban streetwear brands catering mainly to young adult men. The company has attempted to expand, launching several other commerce sites like Monark Box, Boylston Trading, Miss KL, and even a online TV content channel. The roots of the company’s ambition were already evident back in 2007 when Boston profiled the Selkoes:
Part of Selkoe’s effort to capitalize on the following that Karmaloop has generated online—even from scary, embarrassing places like Minnesota—involves directing that momentum into other outlets without repelling the early adopters, the hunters, who made the site so popular to begin with. The company’s biggest gambit is the newly launched KarmaloopTV, which features original online television content.
Those gambits, as it turns out, didn’t pay off. But also evident in the ’07 profile was the brand’s connection to big names like Kanye West. Those are the connections that have dominated the news following Karmaloop’s bankruptcy announcement, and those names that might provide the company a way forward. On Monday, as news first swirled about the company’s financials, Damon Dash said in an interview that he and Kanye West are planning to buy Karmaloop. Selkoe quickly walked back that announcement, telling Boston.com that Dash is one of “a number of groups contacting us trying to work out a deal,” (though the company’s Twitter feed had some fun with the rumor).
— Karmaloop (@Karmaloop) March 23, 2015
Kanye himself hasn’t yet commented on the matter, but it leaves some people wondering why he and Dash might be interested in buying the struggling commerce site. Perhaps they’re convinced by Greg Selkoe’s reassurances, made repeatedly through social media and other means today, that the core Karmaloop brand itself remains in good shape, that it will survive once it emerges from its overextension of recent years.
Karmaloop is here to stay! http://t.co/iq068NT29d
— greg (@Selkoe) March 24, 2015
Kanye’s name has long been closely associated with the brand, so perhaps he wants to make it official. According to Dash, purchasing Karmaloop might also have to do with a dispute with Complex Media’s owner Marc Ecko, whom Dash has accused of exploiting “urban” people and artists. In the interview, he said he would buy Karmaloop to “put Complex out of business.”
Whatever his reasons and the wisdom behind them, the prospect remains just that—prospective for now. In the meantime, Karmaloop will enter the debt restructuring process with its site still online and operating, and its current owners still in place.