Boohoo Eyes Nasty Gal For $20M

One Los Angeles retail brand that filed for bankruptcy in November may be getting a new British owner.

Boohoo.com has eyes on California-based Nasty Gal, which filed for bankruptcy protection last month. The appeal, according to Chain Store Age, is not only the brand but the customer databases, for which Boohoo is bidding $20 million. Manchester, England–based Boohoo targets the teen and young female customer, which is generally similar to those customers who appreciate Nasty Gal’s products. Boohoo could see Nasty Gal as the key to accelerating its expansion into international markets, specifically the American one.

Some analysts are seeing Boohoo as the “stalking horse,” with another company potentially coming in later to seal a bigger deal with Nasty Gal. When the California brand filed for Chapter 11, it released a statement saying it was hoping to “attract a new equity partner or sponsor” to help in its business journey.

The Chapter 11 application is pending U.S. court approval, which is slated to happen in early January. Nasty Gal, which was founded by Sophia Amoruso in 2006 as an eBay shop, had a strong following, was backed by $60 million from investors like Index Ventures and then opened two stores in the Los Angeles area in 2014. More recently, however, the brand has faced troubles with competition and higher costs, with some analysts saying the expansion happened too quickly and was arguably too ambitious. There have been other reports of poor company culture and lawsuits regarding employee firings for being pregnant. Last year, Nasty Girl revenues posted at more than $77 million but had a loss of $21 million in the last fiscal year.

Amoruso made a name for herself not only through Nasty Gal but also via her New York Times best-selling book #Girlboss, which is slated to become a Netflix series. However, she has reportedly stepped away from Nasty Gal more recently.

Just a month ago, Boohoo purchased and took control over PrettyLittleThings.com for £3.3m, which is a fashion website intended for that same younger female demographic.