Rockets of Awesome, a children’s apparel startup, is running low on funding and exploring a sale of the company, according to emails and people familiar with the matter.
The New York City-based company, which laid off about half of its staff and closed its only store in 2020, halted payments to its vendors in February, according to the people familiar and emails viewed by The Wall Street Journal.
A spokeswoman for Rockets of Awesome declined to comment.
The layoffs were meant to be the first step in shifting the company away from high-paced growth and toward profitability, Chief Executive Rachel Blumenthal told the Journal in a 2020 interview. Rockets of Awesome has raised about $49 million through private investors, she said in the same interview. The company hasn’t raised additional funds since 2019, according to FactSet.
A selection backpacks at Rockets of Awesome’s pop-up store in New York in 2019.
Photo: Richard B. Levine/Levine Roberts/Zuma Press
Foot Locker Inc. invested $12.5 million in the startup in 2019, creating a partnership that allowed it to sell Rockets of Awesome merchandise on its website and stores. Foot Locker declined to comment.
Rockets of Awesome is one of several online disrupters struggling to find profit. Allbirds Inc. and Warby Parker Inc., which both reported wider losses in the most recent quarter, have turned to physical retail in search of growth. In November, Casper Sleep Inc. agreed to go private in a deal that valued the mattress company at roughly half of its IPO price, after two years of mounting losses.
Rockets of Awesome, which launched in 2016, has become known for trendy children’s clothes and a subscription service that allows parents to sign up to receive a personalized box of items four times a year.
Rockets of Awesome CEO Rachel Blumenthal speaking at a WSJ event in 2019.
Photo: Adam Schultz/ProductionManager for The Wall Street Journal
The company owes one vendor nearly $1 million for orders that began coming due in December 2021, according to the emails viewed by the Journal. In January, Ms. Blumenthal asked for an extension, while the company pursued a strategic opportunity but in February said the company’s board had directed it to stop paying invoices, the emails show.
Rockets of Awesome aims to secure a buyer by early April, but the board has low expectations for the valuation, she said in the emails. “When we placed our orders, so long ago, we expected to have the funds based upon the performance of the business,” she wrote in an email sent Tuesday. “However, the business performance changed.”
Write to Charity L. Scott at [email protected]
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