Nasty Gal files for bankruptcy
Nasty Gal is filing for bankruptcy.
The company announced on Wednesday evening (09Nov16) that it had submitted documents for Chapter 11 bankruptcy, a code which will allow it to restructure after two years of financial woes. Sophia Amoruso founded the brand in 2006 as an eBay store called Nasty Gal Vintage and it soon grew into a go-to label for fashion fans around the globe. The brand is now confident it can get back to a strong state.
“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,” chief executive Sheree Waterson said in a statement.
“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.”
Sophia is thought to be resigning as executive chairwoman following this move. It’s hoped Nasty Gal can form strategic partnerships with other brands as it builds its strength back, and the company is looking for a new equity partner or sponsor, according to tech site Recode.
This current situation is a far cry from when Nasty Gal’s business boomed in 2012, with sales up $218 (£175) million that year. However things went downhill after the brand opened stores in Melrose Avenue and Santa Monica in 2014 and 2015, laying off 10 per cent of its employees in February 2016, some of which filed lawsuits against the company.
Sophia has recently been busy promoting her second book Nasty Galaxy, a follow-on from her debut #Girlboss which became a New York Times best-seller in 2014.