How Tai Lopez’s Retail Ecommerce Ventures is Rescuing Ailing Retailers

What’s the first thing that’ll come to your mind when someone talks about acquiring distressed retail brands that are past their prime? Most people will think it’s a high-risk proposition. After all, if the existing leadership can’t sustain the business, what’s the point in acquiring it?

Well, serial entrepreneur and investor, Tai Lopez isn’t like most people. In fact, he’s devised a way to find a silver lining in the public downfall of established retail brands. Together with former aerospace scientist and fellow entrepreneur Alex Mehr, Lopex has founded Retail Ecommerce Ventures (REV), a Florida-based holding company.

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In slightly more than a year, Lopez and Mehr’s REV has acquired ailing brick and mortar retail brands, such as Pier 1 Imports, Modell’s Sporting Goods, and Dressbarn. Radio Shack and Stein Mart are the latest additions to the organization’s stable.

How It All Started

Lopez and Mehr’s association span over a decade, when they first connected over their shared love for books and Warren Buffet. While Lopez has been a long-running entrepreneur, investor, and advisor, Mehr used to be an aerospace scientist with NASA.

Mehr later went on to become the co-founder of Zoosk, an online dating service. In July 2019, he sold the company for $258 million to Sparks Networks, a Berlin-based global dating service that owns niche dating apps, such as Christian Mingle, JSwipe, Silver Singles, etc.

Soon after, in November 2019, Lopez and Mehr formally founded REV to revive brick and mortar retail brands by giving them an e-commerce transformation.

Brands Never Die

This is the simple philosophy that Lopez and Mehr have adopted at REV. Instead of building a brand from scratch, they capitalize on the traction and reputation of renowned yet distressed retail brands. Both the founders of REV understand the value of the intellectual property that these bankrupt businesses hold.

Instead of eyeing the expensive physical assets of these brands, Lopez and Mehr focus on digital assets. Their goal is to get the IP rights to use the brand’s identity and existing customer base and make it an online success.

Acquiring and reinventing well-known brands saves REV from the trouble of building brand recognition and loyalty. Instead, the company can directly jumpstart the process by giving these brick and mortar brands a digital makeover.

In most cases, this involves redesigning their websites to incorporate e-commerce functionalities. They use an existing and recognized platform, such as Shopify Plus to make the process easier. Many brands also need a complete overhaul of their existing leadership.

Thereafter, the company uses a dropshipping model to eliminate the hassle and cost of managing physical inventories. Plus, REV’s brands are free to sell their products on Amazon as well.

A Look Into REV’s Portfolio

According to Lopez, REV initially targeted retail giants, such as Barnes & Noble and Forever 21. However, the founders realized that the cost of acquiring the IP rights for these brands could add up pretty quickly. That’s when they started keeping an eye out for dwindling retail businesses with excellent brand affinity.

REV’s series of brand acquisitions started in November 2019 with the purchase of Dressbarn. Thereafter, they went on to acquire Pier 1 Imports in June 2020 for $31 million.

The company’s portfolio further expanded with its acquisition of Modell’s Sporting Goods and Radio Shack. In November 2020, Stein Mart became the latest addition to their widening portfolio. REV acquired the bankrupt department store chain for $6.02 million.

The Proof is in the Pudding

So, how well has REV succeeded in revamping these bankrupt retail brands? Well, the initial results look promising. To begin with, Dressbarn saw a massive 165% increase in sales between the first and second quarter of 2020.

Dressbarn’s annual sales are estimated to reach $65 million this year. And the company is only run by a 30-member team, as opposed to the 9,000+ employees it had during its brick and mortar era. Pier 1 Imports and Dressbarn also reportedly saw their sales skyrocket on Black Friday and Cyber Monday.

Most of REV’s portfolio companies have already gone online. Stein Mart’s website is all set to be relaunched at the beginning of 2021 as well. In a statement issued by the company, Lopez said that they’ll aim to improve the overall customer experience and use targeted social media marketing campaigns to revive Stein Mart.

The Way Ahead

With the rising demand for online retailers (courtesy of the COVID-19 pandemic), the future looks bright for Retail Ecommerce Ventures. According to Mehr, there could be more than 54 businesses that are struggling with the repercussions of the pandemic and fit REV’s criteria too.

The founders are also open to expanding into other industries, including beauty and fintech.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.