Why Is NastyGal Filing For Bankruptcy? The Brand Made A Big Financial Announcement
Bad news for a beloved brand today. NastyGal has filed for Chapter 11 bankruptcy protection, so if you're feeling the brand's trademark look, it might be time to stock up (although, fear not — slip dresses and chunky heels will continue on, if the millennial demographic has anything to do with it). WWD first reported on Nasty Gal's bankruptcy on Nov. 9, and the brand confirmed the news to Bustle via a press release that reads, "Nasty Gal, Inc. (the 'Company') today announced that it has commenced a process to restructure its balance sheet and position the Company for the future. To facilitate this restructuring, Nasty Gal has filed voluntary petitions for relief in Los Angeles, California under Chapter 11 of the United States Bankruptcy Code."
The company's chief executive officer, Sheree Waterson, told WWD, “Our decision to initiate a court-supervised restructuring will enable us 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. 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.” Basically, it sounds like the brand expects some financial restructuring to allow the company to emerge stronger than ever.
This might not be a no-casualty move. ReCode reports that eponymous #GirlBoss Sophia Amoruso is rumored to be resigning as executive chairwoman, although that has yet to be confirmed. Bustle has reached out to Nasty Gal regarding that rumor.
Fans have reacted to the company's announcement on Twitter with general surprise. The 10-year-old, famously female-founded company's announcement has led to an avalanche of forlorn tweets (although it's worth noting the company's has a rocky recent history — layoffs occurred this past February, according to Racked, and the company has faced accusations of poor working conditions, and, most recently, copyright infringement accusations, Teen Vogue reported).
The Nasty Gal press release says the brand has been "exploring strategic partnerships with other strong brands and will continue to explore these options throughout the restructuring process" — so what that will look like moving forward (collab city?) is yet to be determined.
The social media reaction proves the announcement is taking some people off guard.
While others are not surprised.
This customer is looking on the bright side.
The timing is particularly sad for some.
Clearly this person is a big fan.
At least they stock plenty of black!
Image: Via NastyGal/Instagram.