If you’re wondering how a multi-million dollar company like Nasty Gal went bankrupt, you’re not alone. It seems like not so long ago when Sophia Amoruso just came out with her book #GIRLBOSSand was preaching about how you can create your own opportunities and take control. Her rags-to-riches story was so inspiringand motivating and the growth of her company Nasty Gal was so phenomenal. The productsfeatured on her site were affordable but also refreshing and different from all the orthodox styles out there. Nasty Gal hit a very specific demographic of 18-24 year old girls who identified as beingedgy, daring and glamorous.Although I don’t consider myself to be super daring in terms of the way I dress, I still purchased my fair share of “nasty” outfits! (With this bodysuit pictured below beingone of the items – outfit details further down below!)
So let’s take a look at this timeline of the growth and decline of Nasty Gal throughout the last 11 years.
A TIMELINE: THE GROWTH & DECLINE OF NASTY GAL
| 2006 | Sophia Amoruso launches a vintage store on e-Bay called NastyGal Vintage in SF |
| 2008 | NastyGal.com launches |
| 2010 | Nasty Gal revenue hits $10 million and the company relocates to LA |
| 2011 | Nasty Gal revenue reaches $23 million |
| 2012 | Nasty Gal launches its own label (Consisting of 35% of total sales) and has 110 employees |
| 2012 | Nasty Gal revenue reaches $100 million |
| 2014 (May) | Sophia Amoruso releases #GIRLBOSS which quickly becomes a best seller |
| 2014 (Sep) | Nasty Gal lays off 20-27 employees |
| 2014 (Nov) | Nasty Gal opens its first brick-and-mortar store on Melrose Avenue, LA |
| 2015 (Jan) | Sophia Amuroso steps down as CEO of Nasty Gal but stays as executive chairwoman |
| 2015 (Mar) | Nasty Gal opens its secondbrick-and-mortar storein Santa Monica |
| 2015 | Nasty Gal faces lawsuits and criticisms on Glassdoor from former employees |
| 2016 (Feb) | Nasty Gal lays off 19 employees |
| 2016 (Oct) | Sophia Amoruso releases her second book Nasty Galaxy |
| 2016 (Nov) | Nasty Gal files for bankruptcy |
| 2017 (Feb) | Nasty Gal is acquired by Boohoo.com for $20 million (The ONLY bidder in the auction) |
| 2017 (April) | The first season of Girlboss (based on, you guessed it, Sophia Amoruso’s autobiography #GIRLBOSS), a Netflixoriginal comedy series, will be aired |
Oh my. Just recounting that whole timeline was tumultuous. So how did such a rapidly growing (doh, that’s usually why), wildly successful company suddenly file for bankruptcy?
(The following are my own opinions as I attempt to answerhow Nasty Gal went bankrupt)
RAPID EXPANSION +BRICK-AND-MORTAR COSTS
I admit Nasty Gal’s growth rate from 2008 to 2012 was astounding. But it isn’tnecessarily sustainable.Sophia’s uniquetaste paired with well-targeted online marketing produced amazing results in sales ($100 million revenue in 2012). But in 2014 and 15 revenue started to drop whilst expenses continued to grow.
Nasty Galestablished two brick-and-mortar stores which add up to a total of 10,000 square footage within a year. Imagine how much the rent is per month! Going from an online-only business model to also including brick-and-mortar is extremely risky and high cost. Young millennial customers (Nasty Gal’s main target market) are probably used to online shopping by this point and are less motivated to go shopping in person. Personally, if the shipping and return is free, I’d rather browse and purchase online, try it on at home and return whatever I don’t need. I simply don’t go out to shop anymore!
You can read more here about how over funding and over expansion killed Nasty Gal.
PRODUCTS LACKING IN QUALITY
Let’s face it. Nasty Gal isn’t exactly know for it’s amazing product quality. This is an issue I have experienced first hand. Some tops or dresses might look amazing on a 5’9″ skinny model but look rather abysmal when it arrives in my mail box. I also had experiences where the clothes simply weren’t designed well (possibly in the pattern making department) and would fit very weirdly. This is also another reason why brick-and-mortar stores aren’t the best idea. I doubt spending a huge sum on rent and staff per month to let customers try on low qualityproducts will help your sales much, no matter how much interaction you’re getting out of it. (Besides, manypeople like to shop undisturbed, especially the ones who are already buying their products online)
PRICE/PRODUCT RANGE
While the #nastygal aesthetics was always very clear, the price range of the products sold on its website wasn’t always within a reasonable range for their target customers. Would Miss Nasty,who is used to buyinglow to medium quality polyester skin-tight party dresses that cost $50 on Nasty Gal, then go on to purchase a Chanel vintage bag thatcosts thousands of dollars? Possibly not. Even if I personally would, I wouldn’t buy the Chanel bagon nastygal.com. Furthermore, amongst the products Nasty Galused carry (brands like The Jetset Diaries and Kat Maconie), somewere $300-500 – a price range that is significantly higher than what their usual customer is accustomed to. This forces Nasty Galto laterplace these high priced items on sale, resulting in less profit.
INTERNAL MANAGERIALPROBLEMS
Taking a quick look at Nasty Gal’s Glassdoor reviews from anonymous employees will give you a good idea how the company is failing from a managerial perspective. Employees have generally citedunskilled leadership, poor top-down communication, over work and lack of organization. Here are a few comments quoted from the Glassdoor website:
“They do not care about lower level employees, everyone is replaceable, and the second you are no longer “in the circle” you are either fired, or forced to quit because you can’t tolerate the horrible treatment. Secrecy is their main tool and it’s toxic to a company if they want to thrive and want a team that is invested in the company’s success.”
“There’s zero accountability and discipline across the board. It’s so severe that it’s as if they’re in business to lose money.”
“Pay is not great unless you are senior… or executive…[no] tricle down transparency from upper management.”
You can read more here.
Nasty Gal was recently acquired by Boohoo.com (an English e-tailer who also owns Pretty Little Thing) for $20 million. You can read more about the details here. According to WWD, “a core team of original Nasty Gal employees would remain in LA to ensure the DNA of the brand is preserved”.
I went on nastygal.com to find thatthe 50% off everything sale was over and they already have new arrivals. The price range is generally between $20-$100 (which is probably better targeted). They do not have a lot of products yet and do not carry any brands other than their own in-house brand right now. With the iffy experience their vendors have been having with Nasty Gal recently, I don’t imaginenastygal.comcarrying other brands any time soon.
I imagine in the future Boohoo will capitalize on Nasty Gal’s highly valuable domain name and their various social media outlets (2.3 mil on Instagram, 235k on Twitter, 1.28 mil on Facebook and 269k on Pinterest), streamline products, continue targeting Nasty Gal’s niche customer group, reorganize the company structure and put in experienced managers.
I hope they will really be able to getnastygal.combecause sometimes I like a little #nasty in me too. ; )
Missguided
Missguided is pretty much the next Nasty Gal with less publicity because they don’t have an attractive, young, community college drop-out, female ex-CEO. They have some amazing party dresses, cute denim and sexy tops. Personally I think their home page couldbe reworked to attract more eyeballs like Nasty Gal’s did though.
Pretty Little Thing
Pretty Little Thing is the other website that was acquired by Boohoo.com. It hasa similar aesthetic to the ‘party girl’ side of Nasty Gal but might be geared towards a slightly younger target customer. Here are some handpicked items I might pick up myself:
Shopbop
I personally love purchasing from Shopbop for their amazing shipping/return policies as well as the huge variety of clothes they carry. Someof the young and fun brands Nasty Gal used to carry Shopbop also carries! These are my favorite (albeit slightly more $$) picks from Shopbop:
Or you can shop their sale here: (Some AMAZING steals…)
Fur Jacket by Helmut Lang (Also loving this one by Rick Owens)
Mesh Bodysuit by Nasty Gal (Similar here and here)
Bra by Bordelle (You can also wear other statement bras like this and this)
Leather Skirt by Alice + Olivia (Similar here and here)
Mini Lady Dior by Dior
Over The Knee Suede Boots by Stella Luna (Similar here and here)
I hope this post has helped explain how Nasty Gal went bankrupt. I am not a financial or business expert so please leave a comment below if you have an opinion or have more to contribute!
xoxo Tina
FAQs
How did Sophia Amoruso lose her money? ›
Sophia Amoruso single-handedly built an eBay store into a fashion phenomenon, but then quickly mismanaged it into bankruptcy. Now, she's back with a new venture, something she believes she can finally "get right." Sophia Amoruso became an entrepreneur by accident.
Who bought out Nasty Gal? ›She explained in the "How I Became a #GIRLBOSS" chapter of her memoir that in 2008, two years after she opened the store, she was considering leaving eBay, but the online giant made the decision for her. They suspended her account because she put the URL of her future site in the feedback area for customers.
Is Nasty Gal problematic? ›Nasty Gal is owned by Boohoo Group PLC, which was accused of modern slavery in July 2020. An investigation by The Sunday Times discovered that the company were paying their garment workers an hourly wage of £3.50 at a factory in Leicester – much lower than the minimum wage of £8.72 for those over 25.
Why did Girlboss get Cancelled? ›Girlboss has been canceled after just one season—not because it was too expensive, which has been the streaming giant's go-to line in the past, but because it was terrible. Netflix recently announced that it plans to cancel more shows as part of a drive for bolder content. As the company's founder and C.E.O.
Who owns Bossgirl? ›Magazine in 2012. In 2016, she was named one of the richest self-made women in the world by Forbes. However, Nasty Gal filed for bankruptcy. In 2017, Amoruso founded Girlboss Media, a company that creates content for women in the millennial generation to progress as people in their personal and professional life.
How did Nasty Gal fail? ›Not only was the warehouse a big jump, but the manufacturing also took a wrong turning point. The company had to use factories that produced garments that were not up to its company standards. The pieces of clothing Nasty Gal were producing did not look as good as they were styled online and many orders were returned.
Are Boohoo and Nasty Gal the same company? ›It is a bold and distinctive brand for fashion-forward, free-thinking young women. The boohoo group acquired Nasty Gal in February 2017 and has since then developed the brand's international footprint outside of its core market in the US.
Is Girlboss based on Nasty Gal? ›From her beginnings starting an eBay store called Nasty Gal Vintage that turned into the booming fashion retailer Nasty Gal to writing New York Times bestseller #GIRLBOSS and founding the digital media brand and community Girlboss, Sophia Amoruso has been at the forefront of brand-building in the digital age.
Is Girlboss true story? ›“Yes, it's a true-life story, but it's a story that we can tell in a way that's really a homage to her life – but also something we can build and have it be a standalone thing. That just gave it so much possibility.” Amoruso, now 32, quickly came on board after meeting the producers.
Who is Sophia Amoruso best friend? ›
My best friend Kate Stewart is a brilliant artist and painter whose work transports me to a dreamlike space. ...
Does Shein use child labor? ›Child Labor and Labor Practices
One such tag allegedly had "need your help" written within the care instructions. Shein responded to these claims in a TikTok video of its own, stating it's all a big misunderstanding and that it has a "strict code of conduct for supplies, which forbids them to use forced labor."
Shein has been exposed for selling clothing and accessories containing high levels of several toxic chemicals, including PFAS and phthalates.
Is Nasty Gal a good company? ›Yes, Nasty Gal is a legit company and not a scam company. Quality and prices do vary on this site, though. Returns are also NOT free.
Will there be a Girlboss 2? ›Netflix has opted not to renew freshman comedy series Girlboss for a second season. The show, inspired by Sophia Amoruso's popular autobiography, starred Britt Robertson and Ellie Reed. Its 13-episode first season debuted on April 21.
What happened to Girlboss show? ›...
Girlboss (TV series)
| Girlboss | |
|---|---|
| Original release | April 21, 2017 |
Netflix announced on the 25th of June that original series Girlboss, based on the autobiography of Nasty Gal founder Sophia Amoruso, would not be coming back for a second series.
Who is Sophia Amoruso married to? › When was Nasty Gal founded? › Why did Sophia Amoruso start her business? ›In 2017, Sophia Amoruso decided to shift the direction in her life once again. Instead of selling clothes, she wanted to create a media company that helped empower other young women to pursue their dreams. She wrote a book about her life story called #GIRLBOSS, which was later made into a Netflix TV series.
What is Boohoo's mission statement? ›
a fashion brand for a social generation
We're on mission to become the global leader in the fashion e-commerce sector and we're passionate about doing this in a way that respects our people, our customers, our suppliers, our stakeholders, investors and the world around us.
A number of the 'fast fashion' retailer's suppliers in Leicester were found to be underpaying and exploiting staff and making them work in dirty and unsafe conditions.
Are pretty little thing and Nasty Gal the same? ›Recently, The Boohoo Group decided to stop using wool! They are the parent company of big fashion brands like Boohoo, BoohooMan, Pretty Little Thing, and Nasty Gal.
Is Boohoo a sweatshop? ›Its clothes are handmade in London by knitters and seamstresses earning above the London living wage. The business is built on a philosophy of fairness and authenticity, promising customers “no sweatshop, no photoshop”.
Why did Sophia leave Girlboss? ›Amoruso took to Instagram to announce that her departure from the #Girlboss platform was tied to the company's decimated revenue during the pandemic (past reports have indicated that she oversaw a culture rife with poor leadership and high turnover at Nasty Gal, allegations she did not respond to at the time).
Who is Annie based on in Girlboss? ›While Sophia in Girlboss is based on Amoruso, there's no word that Annie could have a real-life counterpart. Amoruso's actual first employee at Nasty Gal was Christina Ferrucci, who she hired on Craigslist, and she could be the inspiration for Annie, reported Racked.
Who is Shane based on in Girlboss? ›Ultimately, though there are some similarities between the two in career, Amoruso made it clear that the only character truly based on real life is Sophia. "Everyone else is [creator Kay Cannon]'s creation," Amaruso told Bustle in an interview. "So, my mom is not actually like that — just want to make that clear, Mom!"
How old is Sophia Girlboss? ›When Sophia was 22, she planted seeds for a company that would blossom into Nasty Gal. Ten years down the line, the 32-year-old entrepreneur has an estimated net worth $280 million.
Who is the actress in Girlboss? ›Girlboss
Who plays Sophia in Girlboss? ›Who is Girlboss star Britt Robertson, and who does she play in the Netflix series? Actor Britt Robertson has landed her biggest role yet, playing fashion entrepreneur Sophia Amoruso in Netflix's new series Girlboss.
Does Apple use child labor? ›
Apple's Company has child labor in its supply chain; however, more recently they are working on permanently banning these inhumane practices from their businesses. It is important for managers to understand how to conduct and implement sustainable business to protect their stakeholders.
Does Amazon use child labor? ›Amazon does not tolerate the use of child labor.
Does Shein treat their workers well? ›Shein Is Even Worse Than You Thought
Workers in both factories were working up to 18-hour days and were given only one day off a month. In one factory, the outlet found women washing their hair during lunch breaks, and workers were penalized two-thirds of their daily wage if they made a mistake on a clothing item.
Is H&M more sustainable than it is ethical? The brand has made great progress in eliminating harmful chemicals, like PFCs, phthalates, and APs/APEOs from its products. It also has a textile recycling program, but only 35% of clothing gets recycled.
Can washing clothes remove lead? ›If you are exposed to lead and your employer does not launder your clothing, you should take the clothing home in a plastic bag and put the clothing directly into the washing machine. You should use detergents to remove lead.
How do I know if my clothes have lead? ›Testing Fabrics for Lead Contamination using the ... - YouTube
Is Zara considered fast fashion? ›Zara is a fast fashion pioneer. New inventory comes in so quickly that a shopper is likely to get a completely new shopping experience each time they walk into a store. Recently, Zara has been making an effort to boost its sustainability image with the launch of its JOIN LIFE movement.
Are Nasty Gal shoes vegan? ›Animal Welfare
On a positive note, Nasty Gal's animal rating is 'Good'. The brand does not use any animal products, but it does not state that it's vegan.
Yes, there is! The Nasty Gal sale section has hundreds of items, and some of them are even marked down by more than 70%. On select Nasty Gal clearance items, you can use a Nasty Gal promo code on these items to make the price even lower.
What were the odd jobs that Amoruso did in her teens? ›She worked in a Subway restaurant as a teen, then held a number of odd jobs like working in a record store and a bookstore. Her parents got divorced after she graduated from high school, so she moved to Sacramento, California, to live a more independent life.
Why did Sophia Amoruso start her business? ›
In 2017, Sophia Amoruso decided to shift the direction in her life once again. Instead of selling clothes, she wanted to create a media company that helped empower other young women to pursue their dreams. She wrote a book about her life story called #GIRLBOSS, which was later made into a Netflix TV series.
Who is Sophia Amoruso best friend? ›My best friend Kate Stewart is a brilliant artist and painter whose work transports me to a dreamlike space. ...
Is Girl Boss true story? ›“Yes, it's a true-life story, but it's a story that we can tell in a way that's really a homage to her life – but also something we can build and have it be a standalone thing. That just gave it so much possibility.” Amoruso, now 32, quickly came on board after meeting the producers.
Who started Nasty Girl? ›Sophia Amoruso: At 22, I started an eBay store called Nasty Gal Vintage, and it exploded. In a few years, we went from $250,000 to $1.1 million to $6.5 million to $30 million in revenue. I had never even worked in an office before, but I followed my nose and built a really big business.
How did Nasty Gal come about? ›Nasty Gal started in a tiny San Francisco apartment stacked with killer vintage, a single laptop and an eBay account. Thirteen years later, we've outgrown that apartment, moved to LA, and today we're bigger and better than ever.
Is Boohoo same as Nasty Gal? ›The boohoo group acquired Nasty Gal in February 2017 and has since then developed the brand's international footprint outside of its core market in the US.
When did Amoruso launch her own website? ›Biography. Sophia Amoruso is the founder of Nasty Gal, an eBay store she launched in 2006 at the age of 22.
Who is Sophia Amoruso married to? › Who is Annie based on in Girlboss? ›While Sophia in Girlboss is based on Amoruso, there's no word that Annie could have a real-life counterpart. Amoruso's actual first employee at Nasty Gal was Christina Ferrucci, who she hired on Craigslist, and she could be the inspiration for Annie, reported Racked.
When was Nasty Gal founded? ›Who is Shane based on in Girlboss? ›
Ultimately, though there are some similarities between the two in career, Amoruso made it clear that the only character truly based on real life is Sophia. "Everyone else is [creator Kay Cannon]'s creation," Amaruso told Bustle in an interview. "So, my mom is not actually like that — just want to make that clear, Mom!"
Why did Nasty Gal fail? ›Not only was the warehouse a big jump, but the manufacturing also took a wrong turning point. The company had to use factories that produced garments that were not up to its company standards. The pieces of clothing Nasty Gal were producing did not look as good as they were styled online and many orders were returned.
Is Nasty Gal a good brand? ›Yes, Nasty Gal is a legit company and not a scam company. Quality and prices do vary on this site, though. Returns are also NOT free.