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Nasty Gal Files for Bankruptcy; Founder, #GirlBoss Author to Step Down As Chair

Bankruptcy Lawyer Bryan W. Stone answers the question: “Will I lose my property if I file for bankruptcy?”

 

The past week has been a tough one for the “Nasty Women” of the world, and not just Hillary Clinton supporters.

Woman with dress Charlotte Bankruptcy LawyerOnline clothing retailer Nasty Gal has filed for bankruptcy and its founder Sophia Amoruso is expected to soon announce her resignation as executive chairperson.

The company, named after a song by funk/soul singer Betty Davis, has been quite literally a classic rags-to-riches success story. Amoruso started the company when she was 22 selling used vintage clothing on eBay. Within a year and a half, the online shop was more than paying Amoruso’s rent and she moved Nasty Gal to its own URL.

The Nasty Gal site soon rose to prominence as one of the first online retailers to capture a distinct market segment. On the early end of the bodysuit resurgence in the fashion world, the brand mixes classic vintage with more modern edgy pieces. Most recently the site sold “Nasty Woman” shirts for supporters of Hillary Clinton after President-elect Donald Trump referred to her as such after a debate.

After $49 million worth of funding from Index Ventures in 2012, Nasty Gal was hailed as one of the fastest-growing private companies in the United States with an additional large international consumer base. Amoruso began selling the brand’s own label of clothes in addition to vintage pieces on the site and published a memoir, #GirlBoss, about her journey. She also launched the GIRLBOSS Foundation that awards grants each quarter to female entrepreneurs.

However, in recent years the company has been plagued by critiques of its employee practices. Nasty Gal had two very public rounds of layoffs, totaling 10 percent of its staff, in the last two years and has been sued by former employees alleging the company fired women when they became pregnant.

Amoruso stepped down as her company’s CEO last year. In a video posted to Nasty Gal’s blog, she questioned whether taking on the role of CEO had been a good fit for her. Despite new leadership and a $16 million funding influx from retail executive Ron Johnson, the company continued to struggle financially.

Once unique, Nasty Gal now faces a slew of competition from dozens of other trend-focused competitors aiming at the demographic that has been the company’s bread and butter over the last 10 years.

The company’s public announcement regarding its Chapter 11 filing said it will not be shutting down Nasty Gal’s site in the immediate future but did not mention plans for the brand’s brick-and-mortar stores. Nasty Gal said it is currently exploring strategic partnerships with similar brands as part of its restructuring in bankruptcy and is seeking a new equity partner.

Throughout its history, Nasty Gal has raised $65 million in investor funding, including $16 million from a round of Series C funding in 2015 and $40 million from Series B funding in 2012.

“Series B” and “C” funding refers to the development stage a startup company is in as it seeks investor capital in exchange for interest in the company.

At the “Series A” stage, a starter business that has shown some of a track record can seek funding to optimize its product and user base. “Series B” funding is where the business expands past the development stage and can concentrate on business development, advertising, sales, tech and support. Finally, at the “Series C” level investors can inject capital into the successful business to expand their investments and potentially acquire other businesses. As the operation becomes less risky, more investors such as private equity firms, investment banks and hedge funds will often join the company’s other investors at the Series C stage.

If you are contemplating bankruptcy in the Charlotte area, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with legally sound advice for your particular situation.

 

About the Author

Kyle Frost Bankruptcy Lawyer Student loan attorneyKyle Frost joined Arnold & Smith, PLLC in 2013 where he focuses his practice on all aspects of civil litigation and bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

Born and raised in upstate New York, Mr. Frost attended the University at Albany on a Presidential Scholarship, graduating magna cum laude with a double major in Political Science and Sociology.  He went on to attended Wake Forest University School of Law in Winston Salem, North Carolina.

Following college, Mr. Frost spent over a year teaching English in South Korea. He worked in a private school in Seoul developing curriculum, English programs, and educating both children and adults that were interested in learning a new language.

In his spare time, Mr. Frost enjoys homebrewing, fishing, and travelling.

 

Source:

http://mashable.com/2016/11/10/nasty-gal-bankruptcy/#0LcQghfuc5qG

http://www.inc.com/bartie-scott/nasty-gal-founder-sophia-amoruso-resign-bankruptcy.html

http://www.inc.com/erin-kim/applicant-of-the-week-nasty-gal.html

http://www.investopedia.com/articles/personal-finance/102015/series-b-c-funding-what-it-all-means-and-how-it-works.asp

 

 

Image Credit:

http://www.freeimages.com/photo/fashion-1437612

 

 

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