Karmaloop files for bankruptcy

By

Obi Anyanwu

Published
Mar 24, 2015

Karmaloop, a 15-year-old lifestyle e-commerce website specializing in streetwear, on Monday announced that it has filed a voluntary petition for Chapter 11 bankruptcy court protection in Delaware.

The restructuring process follows a debt that was incurred to Karmaloop when it launched four new business divisions and the development of television content between 2011 and 2013.

Karmaloop has secured debtor-in-possession financing from a lending group led by Comvest Partners that will support the restructuring with the financing converted into equity upon the company’s exit from bankruptcy provided there are no better offers forthcoming in the auction process.
 
Greg Selkoe, Karmaloop CEO and Founder, said, "The Karmaloop brand is solid and powerful, we simply have been carrying too much debt from past ancillary business startups that were discontinued. We're excited to be able to restructure Karmaloop to focus on and enhance our core business strategy and continue to execute on our plans for profitability.

Karmaloop’s Web site will continue full operations during the bankruptcy, as will its wholly-owned European Web site StreetAmmo, its PLNDR division, the off-price members-only sale section and its Kazbah division.