Today, was announced that @NastyGal will soon file for Chapter 11 bankruptcy. Founder Sophia Amoruso, who gave up the CEO position almost two years ago, started Nasty Gal by reselling secondhand luxury clothing on eBay before selling them directly. She amassed a large number of followers and was a fantastic salesperson. As such, it is hard to understand how a hot business with $65 million in funds raised from investors and yearly revenues of $300 million can fail to meet its debt covenants. However, signs of a struggling business were evident in the recent layoff of 10% of Nasty Gal's workforce, numerous wrongful termination lawsuits from former employees, and the news that the company had failed in its quest to seek a buyer just two months ago. Nasty Gal was the darling of new fashion ecommerce with astounding growth rates that led to large capital raises and even larger debts due to rapid expansion costs. It serves as great lesson that just having large revenue base and social media following does not result in a sustainable fashion business, but that fundamentals and controlled growth are the only way to create long term value. ▫ #SAPEUR.com #DapperSapeur #NewYorkFashionWeek #NYFW #SS17 @Kristineelezaj ▫ #fashion #streetfashion #streetstyle #style #model #modelsoffduty #NewYork #NY #NYC #look #ootd #instafashion #instaphoto #instastyle #blogger #fashionblogger #portrait #hair #makeup #nastygal #Gucci #louisvuitton #zara #shoptique #street (at New York, New York)
