A week ago, my sister shared with me the news about every girl's dream online store, Nastygal. The link to the article can be found here https://www.businessoffashion.com/articles/intelligence/nasty-gal-what-went-wrong.
With 2.3 million followers on their Instagram page, what exactly went wrong?
Nasty Gal is a Los Angeles-based e-commerce company found in 2006 by #GIRLBOSS Sophia Amoruso. They were forced to shut down all 17 physical stores in May 2016. They were filed for Chapter 11 bankruptcy protection on 9 nov to secure financial relief while it restructures. Below are a few reasons why they are failing as quoted from the article.
- Many of Nasty Gal’s vendors were owed several thousands of dollars in back payments. Some were owed more than $100,000.
- When the company raised its $40 million round in 2012, spurred by a jump in sales from a reported $28 million in 2011 to $128 million in 2012, it invested heavily in fulfilment and logistics.
- “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,” said Sheree Waterson, Nasty Gal’s chief executive officer.
This showed that Nastygal was quick to expand and did not manage their finances as well as they should have. It is a pity that they would be gone sooner or later, even with a large group of supporters.
Till then.
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