Things do not seem to be awesome for children’s clothing startup Rockets of Awesome.
As The Wall Street Journal reported Monday (March 21) – citing emails and people familiar with the matter – the company’s funds are dwindling, leading it to consider a sale.
Launched in 2016, Rockets of Awesome is known for selling trendy children’s clothing as well as its subscription service, which lets parents sign up to receive a personalized box of items four times a year.
The apparel seller, which laid off roughly half its workers and shuttered its sole store in 2020, ceased making vendor payments last month. The report said a spokeswoman for Rockets of Awesome declined to comment.
Those layoffs were designed to move the New York City-based company away from high-paced growth and toward profitability, CEO Rachel Blumenthal told the Journal in 2020. Her company had raised about $49 million through private investors, Blumenthal said in the same interview. Rockets of Awesome hasn’t raised additional funds since 2019, according to FactSet.
That same year, Foot Locker invested $12.5 million in Rockets of Awesome, launching a partnership that allowed it to sell the startups products at its store and on its website.
“The investment represents a modern way of thinking in an increasingly competitive climate,” Blumenthal said at the time. “They want to learn from us just as much as we want to learn from them, and that exchange of expertise will give us both an advantage as we continue to shape our businesses.”
The Journal report noted that Rocket of Awesome is among a group of struggling online disruptors such as Allbirds, Casper and Warby Parker.
As PYMNTS reported last week, the glasses seller has had a disastrous first six months as a public company, which peaked at $60 in October following its much-hyped trading debut, to its present price that has now slipped below $23 in mid-March. The company has dropped 60%, taking more than $4 billion in market value with it.
And while the company’s Q4 sales grew 17% to $132 million, the costs connected to building out its brick-and-mortar location along with its its original free “Home Try-On” direct-to-consumer business saw it end the quarter with a $45 million loss.