Nasty Gal to file for Chapter 11 bankruptcy
Nasty Gal, the US-based young fashion etailer founded by entrepreneur Sophia Amoruso, is to file for Chapter 11 bankruptcy to enable it to financially restructure the business.
As a result it is believed that Amoruso, who founded the business 10 years ago at the age of 22, will step down from the board along with Danny Rimer from backers Index Ventures.
In a press release sent to US publication Fortune Nasty Gal CEO Sheree Waterson confirmed the Chapter 11 move. "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,” she said.
#GirlBoss by Sophia Amoruso
Waterson added that the business will also use the period under which it is in Chapter 11 (a form of bankruptcy protection in the US which affords troubled business the time to restructure and refinance) to look for a new backer to inject capital into the business.
Nasty Gal has had a tough year and Amoruso, who is currently on a speaking tour in Australia, had already been forced to cede the role of CEO. The business was one of the darlings of the new generations of dotcoms to emerge in the early 2000s.
Nasty Gal's Nasty Woman merchandise
Its young founder and CEO made a name for herself as a leading entrepreneur growing the business to a reported $100m and penning a best-selling book #GirlBoss last year. Never one to shy away from politics or controversy, Amoruso recently temporarily changed the name of the business on its website to "Nasty Woman" after Donald Trump's famous insult to Hilary Clinton and began selling Nasty Woman merchandise to show her support for Clinton.
Nasty Gal currently ships its trend and celebrity led fashion, targeting young women, worldwide. It is not yet known whether the business will emerge from the process in its current form or be repositioned.
