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Boohoo confirms proposed Nasty Gal bid

Lauretta Roberts
28 December 2016

British young fashion etailer Boohoo has confirmed the proposed acquisition of certain intellectual property assets from US etailer Nasty Gal Inc for $20m.

The Nasty Gal business, which was founded by LA-based entrepreneur Sophia Amoruso in 2002, was placed into Chapter 11 bankruptcy protection last month. Shortly after it emerged that Boohoo had filed a certificate of incorporation of a private limited company for Nasty Gal, Inc with Companies House and was positioning itself as a "stalking horse" bidder ahead of a court auction of Nasty Gal's assets.

Today Boohoo confirmed its intention in a statement. "Subject to US court approval, to be sought on 5 January 2017, Boohoo's subsidiary, Boohoo F I Limited, will be appointed as the 'stalking horse' bidder for the Nasty Gal brand and customer databases, in accordance with Section 363 of the United States Bankruptcy Code. The Group will provide a further update on the proposed transaction on or after this date," it said.

The sale of the Nasty Gal assets will be governed by a court-approved bidding process that will last at least 30 days. Other bidders may enter the race, so it it is not a certainty Boohoo will win, but the stalking horse is generally considered to be favourite in such circumstances.

Boohoo, which is based in Manchester and was founded in 2006, said the acquisition would accelerate the brand's international growth ambitions particularly in the US. The Nasty Gal name is known worldwide thanks to the high profile of Amoruso, who stood down from the business when it entered Chapter 11. A well known speaker and media personality, Amoruso, who was just 22 when she founded the business, published her story in a book last year called #GirlBoss.

Nasty Gal delivered net revenue of $77.1m in the year ended 1 February 2016. This figure includes revenue from vintage clothing and third party brands, which are excluded from the proposed acquisition. It made a net loss after tax of $21m after operating costs. Boohoo's acquisition concerns intellectual property assets only and excludes all operating costs.

If successful the acquisition would be Boohoo's second in as many months. It recently announced it had acquired 66% of the PrettyLittleThing brand for a cash consideration of £3.3m. The fast-growing brand was founded in 2012 by Umar Kamani, who is the son of Boohoo founder Mahmud Kamani.

"Should we be successful in acquiring Nasty Gal it would represent a fantastic opportunity to add such a well-established, global brand to the Boohoo family. Following our recent acquisition of PrettyLittleThing.com we believe this would represent an ideal next step in inspiring an ever-growing range of young customers internationally," said Boohoo's joint founders Mahmud Kamani and Carol Kane in a statement.

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