The fate of the millennial e-retailer has been in question for sometime, but will Boohoo be able to bring it back after buying its intellectual property and customer databases? Boohoo scored all of this for the bargin price of $20 million in February earlier this year.
Nasty Gal failed to properly scale with its $65 million in venture capital funding in November 2016, then filed for Chapter 11 bankruptcy protection while founder Sophia Amoruso moved onto her new venture #GirlBoss, released her first memoir also titled #Girlboss and then turned it into a media platform. The UK brand had originally walked away from acquisition conversations with the LA-based Nasty Gal a few years ago, but November's situation made Boohoo take a second look.
Ultra-fast fashion giant Boohoo turns out clothing from development to wardrobe in less than a month, faster than both H&M and Zara. Boohoo's fiscal year that ended in February showed the brand's net revenues increased by 51 percent year over year to around £294.6 million. Profits were up 97 percent to £30.9 million and gross margins of almost 55 percent.
Boohoo isn't actively-looking but believes that there is room for one more brand in its portfolio. Unlike other companies who would acquire brands to expand their range in either aesthetics or age groups, Boohoo has put all of its eggs in one basket with Generation Z and Millennials. Joint chief executive Carol Kane explained that Boohoo wants to dominate e-commerce at the youth-end of the market. “When Nasty Gal came along, that was rather opportunistic. Looking at the US market where we’ve already seen healthy growth, if we were to grow the US proposition, [acquiring Nasty Gal] made perfect business sense," added Kane.
Two weeks after the acquisition, the site was back up and running with 400 pieces for sale. Now the site has over 1,200. Nasty Gal stumbled in production, planning and logistics; this is where Boohoo has proven masterful. Boohoo has also maintained Nasty Gal's Californian roots with 15 employees based in LA with plans to grow. The team is working hard to bring Nasty Gal up to the same speed as Boohoo and their other brand Pretty Little Thing.
“It’s been very exciting to take that cool LA brand international. We feel that we’re in a much better position to accelerate growth.” Kane said. Nasty Gal now offers same-day shipping in the UK and two-day shipping in the US.
Now only time will tell if this acquisition will be a success, Boohoo have the tools but do they have the Amoruso flare? Nasty Gal originally was successful because of its cult-fanbase and now with a Netflix series 'Girl Boss' the brand is only missing one thing: Amoruso.