Yesterday, Nasty Gal, the retailer founded 10 years ago when Sophia Amoruso began by selling vintage fashion items on eBay, filed for Chapter 11 bankruptcy protection in the Central District of California.
The move is designed to enable the L.A.-based company to “address our immediate liquidity issues, restructure our balance sheet and correct structural issues including reducing our high occupancy costs and restoring compliance with our debt covenants,” the company said in a press statement. “We expect to maintain our high level of customer service and emerge stronger and even better able to deliver the product and experience that our customers expect and that we take pride in bringing to market.”
WWD had reported in September that Nasty Gal was “on the hunt for a possible buyer.”
Nasty Gal has raised $65 million over the years, including from Index Ventures and renowned retail executive Ron Johnson.
Recode reported yesterday that this filing was coming. It also noted that the chapter (no pun intended) follows a couple of turbulent years at Nasty Gal. In addition to laying off 10 percent of its workforce in February to trim costs, it has been the target of numerous employee lawsuits, including by former staffers who say they were fired for becoming pregnant.
Amoruso stepped down as the company’s CEO in January of last year but remained involved as executive chairman.
Recode now says Amoruso — who has found ways outside of Nasty Gal to capitalize on her success, including writing two books (#Girlboss and Nasty Galaxy) and inspiring a new comedy series on Netflix — is resigning from that post.