In 2000 Greg Selkoe founded a small online retailer in his parents basement in Jamaica Plain, a neighbourhood of Boston, Massachusetts. Selkoe grew up following break dancing, graffiti art, and fashion, which influenced his decision to focus his business on urban style and streetwear. He was inspired to initiate the venture while helping to garner advertising for a friend's DJ-culture zine in 1999. Selkoe realized that streetwear brands were only available in a few, select cities. His initial concept for Karmaloop was to provide universal reach for hard-to-find boutique streetwear brands.
We noticed these emerging underground clothing lines. But most towns in America had only Old Navy, Gap, or Banana Republic stores. At the same time, a lot of celebrities, skaters, heroes of the culture like [hip-hop artists] Common and Mos Def were wearing these brands—they had terrific brand recognition. So I called them up and said, ‘You must be doing great—I’d like you to buy an ad in this DJ zine.’ They said, ‘We don’t have any money.’ So I would ask, ‘How can that be? With all these celebrities wearing your stuff?’ And the answer was, ‘Those people all live in New York or L.A. If you don’t live there, you can’t get this stuff.’ That was the genesis of the idea ... there were no resellers so you just couldn't get hold of these brands. But the Internet provides universal reach ... Catalogues have existed for 100 years; an Internet catalogue is more dynamic, more exciting, and more efficient.
The Karmaloop flagship brick and mortar store was launched in 2005 on Boston’s Newbury Street. The store carried products available on the website as well as limited edition items, and was often used as a testing ground for new products. In a 2010 interview, Selkoe revealed that the store "never made a penny," and in 2011 it closed. In the meantime Karmaloop's online presence has grown to include Karmaloop.com, KarmaloopTV.com, MissKL.com, PLNDR.com, BrickHarbor.com, and Kazbah.com.
Even though the physical store closed, Selkoe expressed a commitment to Boston in an interview with Inc.com: "I wanted to stay in Boston. It's my hometown; plus, there are a lot of really smart kids coming out of the universities here, so we grab them before they go anywhere else."