In early January we reported on boohoo.com ’s 260% increase of its year end value from 2016 in part from it’s then recent purchase of the L.A based fashion brand, Nasty Gal.
Well the paperwork has finally gone through and the UK online retailer has cleared the necessary procedures of the U.S. Bankruptcy Court for the Central District of California expecting final approval of the acquisition.
While the increase in shares looks to be a more modest 4% gain this time around, the dual chief executives are particularly upbeat. In joint statement, Mahmud Kamani and Carol Kane said: “We are delighted to have been successful in our bid to acquire Nasty Gal. It represents an exciting opportunity to accelerate our international offering and inspire an ever-growing range of young customers in the US and around the world.” boohoo.com confirmed the $20m deal which marks its intentions to establish its presence in the American market.
The Manchester based company can now count on “certain intellectual property assets and customer databases” from Nasty Gal Inc. which it hopes to add value to its already generous selection of apparel.
“I am enormously proud of the tremendous brand value we have built over the years at Nasty Gal, and deeply grateful for the enduring contributions made to the brand by so many of our passionate employees and vendor partners,” said Nasty Gal CEO Sheree Waterson. “I congratulate boohoo.com on their anticipated successful acquisition and I am confident that Nasty Gal’s strong legacy will complement their business.”
Nasty Gal at its peak had at one time been valued at $200 million, but was unable to keep up with its rapid growth, and the $20 Million bid from Boohoo was not matched or rivaled by any competing offers. WWD reports a solid revenue of $77.1 million only down 9% from 2015. Yet its inability to escape from the red numbers meant a negative EBITDA $15.4 million 2016 which is a staggering 145% negative increase from the previous year’s negative $6.3 million.
Boohoo hopes to fill the void left from founder Sophia Amoruso’s direction, when she left the company as CEO in 2015. Still, a 20 million valuation is still a long way from selling vintage clothing on eBay, and the British based virtual store can now even count on the free publicity generated from Amoruso’s upcoming Netflix series based on her bestselling book, “Girlboss”.