The new owners of bankrupt flash sale e-retailer Choxi.com Inc.’s assets say they won’t revive Choxi’s URL and they hope to win over the retailer’s sizable customer base.
Discount e-retailer jClub, which launched its online store in January, in February acquired the intellectual property of Choxi in a multimillion dollar deal, says jClub, declining to specify further. Chief operating officer Jon Mitchell says jClub has no plans to resurrect Choxi.com, which went offline late last year and left many aggravated customers in its wake. “We have our own site in jClub.com and our focus has always been to build up the jClub.com brand,” Mitchell said via email.
Choxi was originally known as NoMoreRack before rebranding in April 2015. The e-retailer once was one of the fastest growing retailers in the Internet Retailer Top 500 Guide. At its peak, Choxi ranked No. 48 in the Internet Retailer 2016 Top 500 Guide, having done an Internet Retailer-estimated $980 million in online sales in 2015, nearly triple the $350 million it had in sales just two years prior, according to Top500Guide.com.
Choxi’s downfall was swift, however. In August 2016, Choxi’s investors forced out CEO Deepak Agarwal and chief marketing officer Vishal Agarwal left soon after. At the time, the company was dealing with vendors who claimed they hadn’t been paid, angry customers who hadn’t received merchandise and numerous complaints from shoppers on social media.
In November, Choxi.com went offline and its Facebook page disappeared. Neither then-chief merchandising officer Melina Ash, who was also Deepak Agarwal’s wife, according to court records, nor general counsel Cliff Schneider returned requests for comment at the time. That same month, Choxi’s creditors filed an involuntary Chapter 7 bankruptcy petition against Choxi. A month later, that bankruptcy filing was converted to a Chapter 11 filing.
In announcing the acquisition of Choxi’s assets, which is mostly a customer database of several million email addresses, jClub says it hired “key Choxi employees” from the design, copywriting and supply chain management departments to work at jClub. These employees do not include the Agarwals or Ash, according to LinkedIn. The highest ranking former Choxi employee currently employed by jClub is Alex Topalov, who was the technical lead at Choxi and is now vice president of technology at jClub, according to LinkedIn.
Mitchell and Harry Savalia saw value in Choxi’s customer list, which has more than a million shoppers on it. Part of that customer base became disgruntled with Choxi, and building trust with jClub shoppers and vendors is a priority, Mitchell says.
“We know that gaining back the full loyalty of discerning shoppers will take time and effort on our part,” Mitchell says. “We understand what Choxi vendors went through, and we wanted to do right by them and help make up for those losses.”
Mitchell says jClub has more than 100 vendors selling on its site and the e-retailer is developing relationships with vendors that worked with Choxi. To rebuild goodwill with shoppers, jClub only charges shoppers once their item has shipped.
“Our customer service team is based in North America, they are easily accessible and are able to respond quickly to customers’ questions and concerns,” Mitchell says.
Choxi’s Deepak Agarwal could not be reached for comment. Vishal Agarwal in April launched Checkmate Inc., which provides mobile payment software to small and medium-sized restaurants, and he serves as the company’s CEO. In an email, Vishal Agarwal says he hasn’t had contact with Choxi since leaving the company or its new owners.