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How Nasty Gal Went from an $85M Company to Bankruptcy

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Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#51

Post by novaleaf »

mikikian wrote: post #50

To learn about the facts leading up to the bankruptcy, a great resource is to read the declaration in support of the first day motions. This is filed under penalty of perjury so there is a reasonable expectation it is factually accurate. From the filing, here are the financial details [1]: "For the year ended January 31, 2015, the Debtor reported revenues of approximately $85.0 million, gross profit of approximately…

thanks for those details. For those like me who didn't know:

EBITDA = Earnings before interest, tax, depreciation and amortization

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#52

Post by narrowrail »

raiyu wrote: post #46

It looks like overall a classic mistake of trying to go too fast too soon. The issue with taking on VC capital is that you need to be in control of how you spend that money, and if you don't need it, then don't take it. There are also challenges with any business in crossing the chasm. Selling to more customers, or a different set of customers is akin to searching for product market fit a second time and is tricky li…

I hope it doesn't sound too pedantic, but the 'C' in VC stands for capital, so saying money or capital after VC is redundant. The only reason I was driven to write this is because of how many times it was written.

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#53

Post by defen »

spaceflunky wrote: post #45

I was very close to insiders at the company, can't tell you who I know, but you'll have to trust me. Nasty Gal was a lot worse of an environment that this article leads on. There's a lesson to learn here, so that's why I'm posting. Basically, Nasty Gal made a string of horrible investments, one after another, which makes one wonder if they were trying to fail. Lots went wrong, but I'll cover the stuff that hasn't bee…

> hen she decided she had to write a book, so she spent around $500,000 of company money on a ghost writer and marketing for the book. She had a publisher, but the publisher only picked her up because Amoruso was paying all the costs to publish out of the NG's pocket.

Any idea how involved she was with the TV show as well? That had to be distracting: http://www.imdb.com/title/tt5706996/

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#54

Post by spaceflunky »

defen wrote: post #53
spaceflunky wrote: post #45

I was very close to insiders at the company, can't tell you who I know, but you'll have to trust me. Nasty Gal was a lot worse of an environment that this article leads on. There's a lesson to learn here, so that's why I'm posting. Basically, Nasty Gal made a string of horrible investments, one after another, which makes one wonder if they were trying to fail. Lots went wrong, but I'll cover the stuff that hasn't bee…

> hen she decided she had to write a book, so she spent around $500,000 of company money on a ghost writer and marketing for the book. She had a publisher, but the publisher only picked her up because Amoruso was paying all the costs to publish out of the NG's pocket. Any idea how involved she was with the TV show as well? That had to be distracting: http://www.imdb.com/title/tt5706996/

Amoruso was as involved with the netflix production as much they would let her, which is to say a lot. But by this time, Amoruso had mostly handed the company over to Waterson so that Amoruso could focus on building up her own personal brand and #girlboss "foundation."

Basically, Amoruso checked out around 2015 to focus entirely on her own girlboss brand and promoting her book. She was/is totally obsessed with maker herself a celebrity.

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#55

Post by PaulHoule »

atomical wrote: post #26
PaulHoule wrote: post #25

The clothes were awful. It sounded like a good story from a distance, but if you looked at the catalog it was a definite maybe and if you saw the clothes in person you realized they used cheap materials and were photographed from the good angle.

Were the colors off as well? I have bought clothes from online retailers and the colors looked different in person.

Modern plastic clothes often don't have much variation in color.

Go to the Salvation Army sometime, where they often sort clothes by color, and you will particularly notice that almost everything red is made with the exact same dye.

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#56

Post by pdog »

raiyu wrote: post #46

It looks like overall a classic mistake of trying to go too fast too soon. The issue with taking on VC capital is that you need to be in control of how you spend that money, and if you don't need it, then don't take it. There are also challenges with any business in crossing the chasm. Selling to more customers, or a different set of customers is akin to searching for product market fit a second time and is tricky li…

The founder and chief executive had a majority 55% stake. Considering she had final say on all decisions, you can't blame VCs for blowing up the company.

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#57

Post by adventured »

narrowrail wrote: post #52
raiyu wrote: post #46

It looks like overall a classic mistake of trying to go too fast too soon. The issue with taking on VC capital is that you need to be in control of how you spend that money, and if you don't need it, then don't take it. There are also challenges with any business in crossing the chasm. Selling to more customers, or a different set of customers is akin to searching for product market fit a second time and is tricky li…

I hope it doesn't sound too pedantic, but the 'C' in VC stands for capital, so saying money or capital after VC is redundant. The only reason I was driven to write this is because of how many times it was written.

That's not necessarily correct.

When the parent writes:

> A great example of a company taking on VC money

VC can stand for "venture capitalist" in that context. So "VC money" equating to venture capitalist money, would in fact be a proper use.

Further, venture capital is a specific type of money. One could also correctly say: bond money, debt money, home equity money, (the) bank loan money, among others and they act as an elaboration of the type of money in question as all context of money is not the same. If I say: the bank loan, that's not necessarily the same as: the bank loan money. The same can be true for venture capital. If I say: the venture capital (eg: we need to discuss the venture capital situation), it can mean the broader arrangement (such as the VC terms) or situation of fund raising, rather than being about the venture capital cash specifically.

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#58

Post by [deleted] »

narrowrail wrote: post #52
raiyu wrote: post #46

It looks like overall a classic mistake of trying to go too fast too soon. The issue with taking on VC capital is that you need to be in control of how you spend that money, and if you don't need it, then don't take it. There are also challenges with any business in crossing the chasm. Selling to more customers, or a different set of customers is akin to searching for product market fit a second time and is tricky li…

I hope it doesn't sound too pedantic, but the 'C' in VC stands for capital, so saying money or capital after VC is redundant. The only reason I was driven to write this is because of how many times it was written.

[deleted]

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#59

Post by sage76 »

alaskamiller wrote: post #9
headmelted wrote: post #4

The most interesting part of this to me is the purchase by Boohoo.com, itself capitalising on legendary dotcom failure boo.com's branding. It sounds very much like the parent is running a business model very similar to the "one last draw" model Warren Buffet was so successful with earlier in his career. It might make a lot of sense for the right type of investor, too. The growth won't likely be there in the long term…

Revenue is vanity. Profit is reality. Selling $85MM in 2014 is nifty, but fashion industry is hard. Average EBITA is maybe 10%: http://www.mckinsey.com/industries/retail/our-insights/the-s... to realize how brutal it is. Let's piece this together... She had 280 FTE at 2013 and got into a lease for 500k sqft warehouse: http://www.inc.com/30under30/donna-fenn/nasty-gal-sophia-amo... At ~$60k/yr avg and we'll pretend a…

In your opinion, is the same thing going to happen to Stitchfix? They are nearing unicorn status but they have warehouses and they own inventory.

Re: How Nasty Gal Went from an $85M Company to Bankruptcy

#60

Post by narrowrail »

adventured wrote: post #57
narrowrail wrote: post #52

Earlier quoted context omitted.

I hope it doesn't sound too pedantic, but the 'C' in VC stands for capital, so saying money or capital after VC is redundant. The only reason I was driven to write this is because of how many times it was written.

That's not necessarily correct. When the parent writes: > A great example of a company taking on VC money VC can stand for "venture capitalist" in that context. So "VC money" equating to venture capitalist money, would in fact be a proper use. Further, venture capital is a specific type of money. One could also correctly say: bond money, debt money, home equity money, (the) bank loan money, among others and they act…

I just happen to disagree, and I believe when one says I took VC that means 'I took venture capital', not 'I took venture capitalist money.' There is a wiki entry[0] for VC, and when referring to venture capitalists it is spelled out, not abbreviated VC.

[0]https://en.wikipedia.org/wiki/Venture_capital

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