KarmaLoop went from $100 million in sales and the forefront of E-commerce to becoming the highest profile E-commerce site to file for Chapter 11 bankruptcy.
In a comprehensive Complex think piece, we finally learned what led to the once-profitable KarmaLoop's financial struggles. Started by Boston native Greg Selkoe as a counter to the "evil empire" of mall brands, KarmaLoop as an online retailer was the "boutique to people who didn't have boutiques" where they lived.
It gave up-and-coming brands a platform to sell and showcase their products, and had a level of cultural cache and relevancy that was virtually unparalleled at one point. In addition, KarmaLoop was innovative in its use of media content to break EDM acts and later, emerging hip-hop acts like Kendrick Lamar and A$AP Rocky.
However, KarmaLoop's work environment and business practices were far from orthodox. Office parties reportedly were places for people to have sex and use drugs, according to one former employee's account.
As long as the business was making money (which it did, to the end of $100 million at one point), nobody questioned Karma Loop's lack of structure.
After over expansion and financial mismanagement though, jobs were quickly cut from the company, morale dropped dramatically and the popular e-commerce site became a shell of itself, leading to a dramatic chain of events that would end this past March with the e-commerce site filing for Chapter 11 bankruptcy.
While trends come and go, good business practices are timeless. Hopefully KarmaLoop's fortunes can find a way to come full circle...