Boohoo.com offers $20m to snap up Nasty Gal
UK online clothes retailer Boohoo.com has offered $20m to buy the assets of Nasty Gal, a US-based e-commerce and fashion company that filed for bankruptcy last month.
Boohoo on Wednesday said it would not be taking on the costs of Nasty Gal, which made a loss of $21m last year. The proposed deal follows the company’s purchase this month of a controlling stake in fellow UK fashion website, PrettyLittleThing.
The company warned, however, that under US bankruptcy rules its offer to buy the US brand could still collapse if another bidder emerged and was willing to pay more.
Shares in the Aim-listed group were 2.6 per cent higher at 136p in mid-afternoon trading in London.
The failed US group was founded by Sophia Amoruso in 2006 when she was a down-on-her-luck young photographer using eBay to sell vintage pieces she picked up in flea markets.
One of the first fashion start-ups to build a devoted following among consumers using social media, Nasty Gal in 2012 received $50m of funding from Index Ventures, a venture capital fund whose previous investments include including online brands Net-a-Porter, Asos and Etsy.
Last year it reported revenue of $77m, although this included sales of vintage clothing and third-party brands, which are excluded from the Boohoo transaction.
Boohoo’s joint chief executives Mahmud Kamani and Carol Kane said in a statement: “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.”
Manchester-based Boohoo, which launched in 2006, targets 16 to 24-year-olds with own-branded clothing.
This month it lifted its sales growth targets, prompted by what it said was strong Black Friday trading and the acquisition of the PLT stake. The company now has 4.5m active customers, 28 per cent more than last year, and expects revenue to rise by 30 to 35 per cent over the next year.
The company’s strong growth, along with that of online rivals such as Asos, are an example of how online upstarts are disrupting the apparel market, while established offline retailers are struggling amid falling clothing sales.