US court approves sale of Nasty Gal assets to Boohoo

A US bankruptcy court has approved the process for the sale of certain Nasty Gal assets to Boohoo, the Manchester-based young fashion etailer has confirmed.

Boohoo confirmed over Christmas that it had tabled a $20m bid to acquire "certain intellectual property assets" as well as the customer databases of the stricken US etailer, which is in Chapter 11 bankruptcy.

The move places Boohoo in the position of "stalking horse" bidder, which is generally the favourite to win the race. The transaction will now be governed by a court-approved bidding process with the final bids due in on 2 February.

Should Boohoo's bid be successful the transaction would be subject to final approval by the US courts, expected on or around 8 February.

Boohoo believes the acquisition will accelerate its international growth ambitions, particularly in the US, and would be its second acquisition in recent weeks. In December it purchased a 66% stake in PrettyLittleThing for a cash consideration of £3.3m.

Nasty Gal was founded in LA by the then 22-year-old entrepreneur Sophia Amoruso, who stepped down from the business when it entered Chapter 11 in November. It delivered net revenue of $77.1m in the year ended 1 February 2016 and made a net loss after tax and operating costs of $21m. Its revenue includes the sale of vintage clothing and third-party brands which would not form part of any sale to Boohoo.