Los Angeles-based e-commerce site Nasty Gal has filed for Chapter 11 bankruptcy, a decision made during an October 24th board meeting. In a statement to the press, company CEO, Sheree Waterson said, “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.”
Founded by Sophia Amoruso ten years ago, she stepped down from her role as CEO to executive chairwoman last year, and according to Recode, she is resigning from that position, too. No need to feel too badly for Amoruso, however. Following the success of her first book “Girl Boss,” she followed with “Nasty Galaxy,” and in June, made her appearance on Forbes’ second annual list of America’s Richest Self-Made Women with an estimated net worth of $280 million, making her wealthier than Beyoncé.
The company’s challenges aren’t new, and according to WWD, it was on the hunt for either financial support or a buyer in September. Earlier this year it laid off ten percent of its staff, and has been described by former employees as a difficult place to work. While Nasty Gal frequently has been cited as copying the designs of other brands, most retailers of its ilk are guilty of the same practice.
Similar to Karmaloop, Nasty Gal no doubt benefited from its earlier embrace of an online selling model, a competitive advantage it lost as more experienced and better funded retailers began to attack the space, often offering similar-quality offerings at a lower price.
