Online fashion retailer Boohoo is lining up to buy the rights to the Nasty Gal fashion label after the US internet business fell into bankruptcy last month.
The $20m proposed deal will be considered by a US court, which is set to approve Nasty Gal’s application for chapter 11 – the US form of bankruptcy – on 5 January.
The potential acquisition comes less than a month after Manchester-based Boohoo spent £3.3m on securing control of PrettyLittleThing, a fast-growing fashion website set up by the children of Boohoo’s co-founder Mahmud Kamani.
In a statement to the UK stock market, Boohoo said the sale of Nasty Gal’s assets will be governed by a court-approved bidding process lasting at least 30 days and that Boohoo’s bid may not be successful.
Kamani and Carol Lane, joint chief executives of Boohoo, said: “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.”
Nasty Gal was founded as a vintage eBay shop by Sophia Amoruso in 2006 and went on to raise more than $60m from investors including former Asos backer Index Ventures to transform itself into an international site selling a range of brands and its own-label young fashion as well as vintage finds.
Boohoo said that Nasty Gal was a “bold and distinctive brand for fashion-forward, free-thinking young women” and that acquiring it could accelerate the group’s international expansion, particularly in the US.
Nasty Gal made a net loss of $21m on revenues of $77.1m in the year ending 1 February 2016, including sales of vintage clothing and third-party brands, which are excluded from the proposed transaction.
When it filed for bankruptcy protection the company said it wanted to “attract a new equity partner or sponsor,” to help it move forward.
