This last Wednesday, the Los Angeles based Nasty Gal filed for bankruptcy. In court, not too long after their petition, it was established that the company was filling for Chapter 11 protection. Nasty Gal was founded ten years ago by 32 year-old Sophia Amoruso. Although the company has blown up into the biggest e-commerce startup after obtaining its start as an eBay shop. Unfortunately, due to the filing, Amoruso plans to resign from the firm after this great downfall.
Citing a board meeting on October 24th of this year, Nast Gal’s CEO Sheree Waterson stated,
“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.”
The company refused to let the defeat ruin their reputation and further expect to deliver quality service and product after obvious required changes.
As this is a tragedy in the eyes of both, the company and its loyal customers, this is not the end of Nasty Gal. As Amoruso plans to resign as executive chairwoman, a position she took after stepping down as CEO of last year, she is currently searching for partnerships with brands deemed appropriate. These partnerships would then allow the opportunity for the company to get back on its feet, and enter the market new and improved.
As the brand desperately searches for answers, they took several unusual actions. WWD last reported in September that the brand was “aggressively looking for capital” and maybe even considering a sale of the business. In Feburary of this year, the company laid off about ten percent of its staff and has repeatedly been guilty of the sale of knockoffs, discrimination, false termination, and other reports of “toxic” working environments for their employees. Within just this past year, Forbes’s estimations calculate that Nasty Gal surpassed $300, in comparison to its $130 million in revenue in 2014. Amoruso has made the Forbes’s list of America’s Richest Self-Made Women with an estimated net worth of $280 million at only the age of 32. The company’s future endeavors now rely on the settlement of this said partnership, and will hopefully gather back their reputation, and further success.