What do Dressbarn, Pier 1 Imports and Modell’s Sporting Goods have in common besides bankruptcies and store liquidations?
They’ve all recently been scooped up by a 43-year-old self-help guru who raises chickens and cows on a ranch in Virginia, drives a Lamborghini and a Rolls-Royce and churns out blog posts like “How humans can live to be 700 years old” and “My grandma refused to salute Hitler.”
Tai Lopez — whose Web site hawks wisdom for Web entrepreneurs on “traffic mastery” and “Instagram hacks” — has launched a new company, Retail Ecommerce Ventures, that’s shelling out tens of millions of dollars for a growing assortment of down-and-out retail brands. And he’s been keen to broadcast REV’s deals to his more than 10 million social-media followers.
“Yesterday I wired $31 million to buy the company Pier 1 Imports. That’s fun,” Lopez said in a rambling, 23-minute Facebook video he posted July 31, leaning against the side of his pickup truck. “It’s good to be underestimated, my friend.”
Lopez’s business partner is Alex Mehr, a 40-year-old, ex-NASA scientist who co-founded Zoosk, a dating site that sold for $298 million last year. Together, they’re buying the intellectual property of some of the highest-profile victims of the carnage that has engulfed the retail industry.
In addition to Dressbarn in November, Pier 1 in July and Modell’s in August, the duo’s Miami-based firm acquired Linens ’N Things and the Franklin Mint in June from Sequential Brands Group for an undisclosed price. Another three are in the pipeline, Lopez says, declining to identify them.
Their big bet: That these retail names have the potential to become cash cows online, even if the thousands of stores they used to operate are getting shuttered.
“Alex and I disagree with most business people — except Warren Buffet — on most things,” Lopez, told The Post. “This thought that Dressbarn or any of the other brands we’ve bought are dead is illogical. I want a business that does $10 million a month in sales and it needs to last 10 years.”
Lopez — who claims to read a book a day and says he has spent as much as $10,000 a month on medical tests to prolong his life — boosted his profile in 2015 when he did a Ted X talk that went viral. Today he sells subscriptions for $9 a month for his course on the “12 Key Things for Living a Better Life” and a $197 annual subscription to learn about his stock picking prowess.
Now, he says he needs 500 investors to buy the bankrupt brands that are fast becoming available due to the pandemic. A pool of 100 accredited investors— individuals with a net worth of at least $1 million not including their house — have backed Lopez since 2015, according to a six-minute video on REV’s Web site. The number has since doubled, Lopez told The Post.
Attempts to revive dead retail brands online have been mixed. Linens ’N Things, which REV scooped up in June, has changed hands multiple times as a Web-only business since the home-furnishings chain liquidated in 2008. It has been all but shut down since 2018. But REV claims it can do Web sales, marketing and distribution better than others have, even as it eliminates costs like store rent, payroll and sprawling headquarters.
“We want to hire some former Linens ’N Things people who knew the brand and we’ll combine them with new school people who understand the Internet,” Lopez said.
Lopez says the key to REV’s marketing strategy are Facebook and Google ads. He and Mehr say they have spent $600 million on ads for their brands over the years, the majority of which went to Zoosk. REV in June also bought two warehouses in Virginia, near Lopez’s farm where he operates a meat-delivery business called Farmers Box. It’s now in the process of reviving its brands in cities spread across the country, each with its own management team. Lopez carries the title of executive chairman at each brand. Mehr is the CEO of REV.
The 58-year-old Dressbarn chain, which closed 650 stores last year under its previous owner Ascena, is off to a strong start under REV, having generated $65 million in annualized revenue in July, the partners say. The women’s clothier’s new CEO is Shayan Zadeh, a self-described “serial entrepreneur” who was also a co-founder of Zoosk. He works out of Houston and manages a team of 30 buyers, a third of which are based in Manhattan’s Garment District, where they had worked previously.
“We hire the same buyers and vendors as the previous company so we have something to stand on,” Mehr said.
REV’s strategy is to be light on assets. “We don’t own a lot of the inventory and are essentially listing other people’s products that they ship out to the customer,” Mehr says. In a typical transaction, vendors and REV agree on a price for a given clothing item. When the item is sold, REV pays the vendor a cut and manages the billing.
REV has made the Dressbarn site “less clunky” by eliminating steps in the checkout process and adding a mobile app for the first time, according to Lopez. REV’s technology helps to determine whether an item stays on the site — if it’s selling well — or gets kicked off because it’s a dud.
“We’ll post something on the site for one day and if it’s bad, we take it down,” he said.
“The layout is a little easier to navigate and it’s easier on the eyes,” agreed an analyst who used to cover Ascena. “The ability to peruse the selection is cleaner, too.”
But the partners can be slippery on details, at first telling The Post that Dressbarn’s Web site features 10,000 items compared to the 2,000 under Ascena. Pressed about the numbers, Lopez later conceded that REV is selling about the same amount of Dressbarn merchandise that the previous owner had, around 3,000 different items.
At least one Dressbarn vendor said it hasn’t been shipping anything directly to consumers since REV took over. Dressbarn is ordering much smaller quantities than before and has canceled a few orders, according to the vendor.
“The site doesn’t just cater to the typical Dressbarn customer anymore,” the vendor said. “It’s a little all over the map, trying to be sexy while still offering the same frumpy stuff it always had.”
Lopez says REV’s approach is similar to some of the largest licensing companies like Authentic Brands Group, which recently has scooped up Forever 21, Barneys and Brooks Brothers. But unlike Authentic Brands, REV doesn’t license its brands for others to sell, he says.
“There is risk involved if the economy goes haywire and sales drop on all our brands,” he admits.
In the meantime, Lopez says success will come if he and Mehr are not “competitor focused. Ultimately what sinks businesses are people and the wrong decisions they make.”