The Post has learned that the flashy company that bought a string of defunct retail brands like RadioShack, Pier 1 Imports and Model’s Sporting Goods is on the verge of filing for bankruptcy.
Tai Lopez, CEO of Miami-based Retail Ecommerce Ventures, is a self-help guru who cites Bill Gates and Mahatma Gandhi as inspirations and commits up to $1 million a year for his “coaching and consulting expertise.” I will charge Sources familiar with the company’s finances said it included aging retailer names such as Dressbarn, Linens ‘N Things, Stein Mart and Franklin Mint.
But more recently, Lopez and his co-founder Alex Mehr — a former NASA scientist who helped coordinate REV’s acquisition after selling Zoosk dating site for $298 million in 2019. — publishes their privately owned licensing company’s books to potential investors. Sell all assets, file for bankruptcy or hail mary financing,” the source said.
“They are running out of cash,” said a source with direct knowledge of the situation.
According to sources, REV’s earnings and losses were both around $60 million last year, with 2021 sales of around $150 million and a loss of around $90 million.
It has about $200 million in debt, the sources added.
Mehr and Lopez did not respond to multiple emails or requests for comment.
on thursday The Wall Street Journal reported REV hired law firm Kirkland and Ellis to explore restructuring options.
The company recently said it would suspend payments on debt, the WSJ reported this week, citing a lawsuit filed by the vendor.
A major red flag surfaced last month when discount retailer Tuesday Morning filed for Chapter 11. It comes just months after Mehr and Lopez paid him $35 million for control of the Dallas-based chain last September.
“Because they have investors, the investments they made in less than a year are the investments,” said Adam Stein-Sapir, portfolio manager at Pioneer Funding Group, which specializes in distressed bonds. The perception that they aren’t worth it can affect them.” .
“It’s getting harder for REV to raise more money from investors who might be thinking, ‘You guys just set millions of dollars on fire.'”
Boasting nearly 8 million followers on TikTok, Instagram, YouTube, Snapchat and Facebook, Lopez has authored self-help books such as 67 Steps to Be Wealthy and Happy, among which incorporates the teachings of the powerful. Celebrities like Bill Gates, Charlie Munger, Peter Drucker, Gandhi, and my personal mentor. “
Lopez worked with Mail, an Iranian-born immigrant with a PhD. The University of Maryland graduate, who worked on “risk and safety management for NASA’s space exploration missions,” according to the Securities Report, was at the height of the retail carnage that saw nearly 10,000 stores go out of business in 2019. .
REV acquired the chain’s intellectual property and sold its brick-and-mortar stores in a plan to operate as an online-only business.
They paid Pier 1 Imports $20 million, Modell’s $3.6 million, and Stein Mart $6 million.
“They were high-octane machines that grew very quickly,” said one brand licensing officer who met the pair early in their rise.
Prior to the purchase on Tuesday morning, REV raised funds through a series of investor webinars via Zoom and emails seeking “accredited investors.” This is a medium-sized whale with a net worth of over $1 million, excluding primary residence, and income from spouse or with spouse above her $200,000 or her $300,000. Partner as defined by the Securities and Exchange Commission.
Last July, Mehr sent the client the following email:
“Join us for our Investor Orientation Call tomorrow Tuesday if you want to learn more about our deal that pays up to 25% annually in monthly payments.”
Two weeks later Mehr sent another email.
And September 12th: “Want to be part of REV’s private deal flow? We’ve already paid over $25 million to our investors!”
In fine print, the email said, “Unless you are an accredited investor, you are not permitted to participate in phone calls or trades.” You can lose everything,” he warned. market trading. “
Promotional emails seem to have stopped in November.
David Tawil, president of ProChain Capital, said REV’s method of attracting investors, especially the promise of certain returns to investors, could raise legal issues.
“Federal regulators, including the SEC, are very sensitive to retail investors being sold on guaranteed returns without any basis,” Tawil told The Post.
Meanwhile, a quick look at REV’s collection of retail sites reveals problems, industry sources say.
The now bare-bones Modell site looks like it hasn’t been updated in months.
“Football season is just around the corner!” reads the first message after clicking the NFL tab, even though the NFL season ended last month.
Other tabs that promise licensed caps, jerseys and sports regalia are completely empty.
Some of the products available include barbecue grill covers, t-shirts, and purses with random sports logos.
“This is crazy,” exasperated Mitch Modell, the former CEO of the high-profile retailer, in an interview with The Post. “[They] Genuine product not available [and] We are selling things from 2021. It’s all outdated.
The model claimed she was rejected by Lopez shortly after REV acquired the former Big Apple flagship brand for nearly $4 million in 2019.
“I tried to defend my brand, but there was no interest on his part,” said the model.
REV made headlines in December 2021 when it announced plans to rebrand 100-year-old RadioShack into a cryptocurrency exchange platform.
There was no mention of cryptocurrencies this week on sites promoting Cyber Monday and offering a mix of different products under “new arrivals” such as guitars, ukuleles and toasters.
Last June, RadioShack’s Twitter account was met with disdain when it began using profanity and drug references.
Elsewhere, the Linens ‘N Things site lists a handful of comforters under the “Bedding Basics” tab.
Pier 1’s usually high-end glassware and china have given way to lower-rent products.
“They appear to buy exclusively from defunct retailers like TJ Maxx and Marshall’s.”
“There is a mix of old brands, mediocre brands, and irrelevant brands, selling too many sold-out or uninteresting items,” the expert added.
“Their sales are not very good.”
