Will e-retailer Karmaloop step in a new direction under Shiekh Shoes?
March 23, 2016 04:47 PM
Troubled streetwear web retailer Karmaloop has its second owner in a year with its acquisition by Shiekh Shoes.
Shiekh Shoes LLC, No. 781 in the Internet Retailer 2015 Second 500 Guide, bought Karmaloop for an undisclosed price.
“There is a tremendous opportunity to re-tell the Karmaloop story and grow the brand,” Shiekh Shoes president Matt Fine said. “We see additional opportunities to leverage the Karmaloop assets to grow our existing businesses in both the bricks-and-mortar and e-commerce channels.”
Shiekh does not disclose its online sales figures. Regarding figure online plans, a Shiekh spokeswoman says “we will leverage Karmaloop’s e-comm know how to strengthen our other online platforms as well as leverage the Shiekh back end to make Karmaloop more profitable.” Shiekh also has plans to tweak Karmaloop’s overall product mix.
The acquisition marks the latest chapter in what has been a tumultuous 12 months for Karmaloop, No. 152 in the Internet Retailer 2015 Top 500 Guide. The struggling online apparel retailer filed for Chapter 11 bankruptcy protection in March 2015 and was rumored to have attracted interest from the likes of rap superstar Kanye West. Two months later, Karmaloop was sold—to private investment firm Comvest Partners and finance company CapX Partners for $13 million.
Five days after the deal, Comvest and CapX installed Seth Haber as new CEO. A Shiekh spokeswoman says Haber is no longer with the company. The LinkedIn profile for Fine, Shiekh’s president, lists him as being the president of Karmaloop, effective this month.
Karmaloop’s online sales have increased steadily over the past five years. Top500Guide.com data shows the retailer’s web sales grew to an Internet Retailer-estimated $216.3 million in 2014 from $72 million in 2010, a compound annual rate of 31.65%. Shiekh Shoes, meanwhile, has a considerably smaller online footprint, according to Internet Retailer data. Its online sales were an Internet Retailer-estimated $9.8 million in 2014 compared with $6.4 million in 2010, an annual growth rate of 11.57%. Shiekh has 128 stores in nine states.