Nasty Gal Files for Bankruptcy
Nasty Gal might soon come to an end, as Sophia Amoruso’s fashion company is reportedly filing for bankruptcy. But how did it get there?
Started as a vintage e-Bay shop 10 years ago, Nasty Gal soon became one of the fashion industry’s fastest-growing e-commerce companies, with founder and #GirlBoss Sophia Amoruso, who at that time was only 22, becoming a sort of visionary institution (we highly recommend reading Amoruso’s bestselling autobiography, #GirlBoss, while waiting for its Netflix inspired series).
As reported by WWD, Nasty Gal has been undergoing very difficult times in the past few years, with the company “aggressively looking for capital and possibly a new owner’, as well as experiencing frequent rounds of job losses.
When asked about the decision to file for bankruptcy, Nasty Gal’s chief executive officer Sheree Waterson told WWD that “our decision to initiate a court-supervised restructuring will enable us to address our immediate liquidity issues, restructure our balance sheet and correct structural issues including reducing our high occupancy costs and restoring compliance with our debt covenants. We expect to maintain our high level of customer service and emerge stronger and even better able to deliver the product and experience that our customers expect and that we take pride in bringing to market.’
As reported by the tech news site Recode, which greatly covered the news regarding its business-related side, Amoruso (who already handed over her role of chief executive in 2015) is planning to resign from her position of executive chairwoman, as the company files for chapter 11 bankruptcy and restructures.
Funded by Index Ventures in 2012, Nasty Gal got funded by retail exec Ron Johnson too, who invested a grand total of $16 million in the company in 2015. That said, however, Nasty Gal’s decreasing sales exceeded the funds, putting both Nasty Gal and Sophia Amoroso in an unsure position.
In a recent press release, the company stated that Nasty Gal was now “exploring strategic partnerships with other strong brands and will continue to explore these options throughout the restructuring process,” and that it “expects to attract a new equity partner or sponsor to take the company forward with a healthy balance sheet.”
As if things weren’t tumultuous enough, Nasty Gal has been coming under fire throughout these past two years for accusations such as toxic and discriminating working environment, with more and more employees speaking up and accusing the company of being “a horrible place to work for pregnant women,’ as reported by Buzzfeed in June 2015. The company did answer to such accusations stating they were nothing but “false, defamatory and taken completely out of context.’
Most recently the company was waded into politics after US candidate Donald Trump called Hilary Clinton “a nasty woman’, urging Amoruso to show her support selling “nasty woman’ clothing pieces.
Is this the end of high fashion e-tailers as we know them?
Photo courtesy of Nasty Gal