Nasty Gal, the online fashion retailer heralded as the future of retail, has filed for Chapter 11 bankruptcy protection after the board declared that the company is basically insolvent.
The company listed assets of $10 million to $50 million and liabilities in the same range, according to bankruptcy court documents.
Large unsecured creditors include real estate companies owed money on leases and clothing vendors.
Nasty Gal, founded by Sophia Amoruso, experienced rapid growth and became a darling of business journalists, who chronicled the company’s new approach to fashion retail.
In 2015, Forbes estimated Nasty Gal surpassed $300 million in revenues, tripling its sales in three years. As more documents become public in the bankruptcy case, we’ll be able to see just how accurate Forbes’ estimate was.
Nasty Gal also came in No. 1 in Internet Retailer’s listing of top 500 performing e-commerce companies last year, besting companies like Amazon.
Amoruso, who wrote a hit book called #GIRLBOSS, debuted on Fortune’s list of America’s Richest Self-Made Women with an estimated net worth of $280 million.
Actress Charlize Theron is even producing a Netflix comedy based on Amoruso’s life story, according to Forbes.
The company has raised money from venture capital. According to the Wall Street Journal, retail veteran Ron Johnson led a round of funding in 2015 that totaled $16 million. In 2012, Index Ventures put $40 million into the company.
The money in part was to fund a brick-and-mortar retail strategy. Nasty Gal currently has stores in Los Angeles on Melrose Avenue and the Santa Monica 3rd Street Promenade, two very expensive locations.
Nasty Gal CEO Sheree Watson, who joined Nasty Gal in 2015, told WWD that the bankruptcy filing will allow the company to address liquidity issues, restructure the balance sheet, and reduce occupancy costs.
Interestingly, the executive who signed the bankruptcy petition is familiar to the industry. Joe Scirocco, the former CFO of Quiksilver and TOMS, is listed as Nasty Gal president on the court documents reviewed by SES.