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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

#91

Post by trome »

taytus wrote: post #83
moomin wrote: post #72

I'll pick out a thread here: the toxic culture. When businesses fail, it's regarded as obvious that the toxic culture contributed to the downfall. With successful businesses like Uber or some bank you recently read about, it's assumed that somehow these behaviours are what makes the companies profitable. My own theory is that toxic culture is a drain on every company with one, like a parasite on a host organism. Some…

I don't disagree with your analysis, but can we stop calling uber a successful business? It has been probed countless times that they are bleeding money and still is not clear if they will ever be successful.

Yeah, as of yet Uber is not able to turn a profit, and is surviving on massive subsidies. Short of self driving cars, this is unlikely to change.

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

#92

Post by dtornabene »

taytus wrote: post #83
moomin wrote: post #72

I'll pick out a thread here: the toxic culture. When businesses fail, it's regarded as obvious that the toxic culture contributed to the downfall. With successful businesses like Uber or some bank you recently read about, it's assumed that somehow these behaviours are what makes the companies profitable. My own theory is that toxic culture is a drain on every company with one, like a parasite on a host organism. Some…

I don't disagree with your analysis, but can we stop calling uber a successful business? It has been probed countless times that they are bleeding money and still is not clear if they will ever be successful.

100% this. I'm amazed that its still given this rhetorical leeway in discussions. As a sibling noted, it survives on subsidy.

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

#93

Post by tedmiston »

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…

Was it really ever an $85M business if it never technically made money? (Per EBITDA)

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

#94

Post by throwaway2048 »

tyre wrote: post #86
enraged_camel wrote: post #75

Earlier quoted context omitted.

>>With successful businesses like Uber or some bank you recently read about, it's assumed that somehow these behaviours are what makes the companies profitable. I'm not sure that's true. At least with Uber, it's pretty well-understood that they are successful despite their toxic culture. And that's mostly because they have received billions from VCs, which does a great job shielding them from the consequences of bad…

I don't think it is universally agreed that Uber is successful despite its culture. It may be that, in at least some industries, ruthless aggression is a financially advantageous attitude. Investment banking comes to mind. If we want to change culture, it has to be for reasons other than money. The Pyramids were a phenomenal project that we couldn't realistically replicate today (due to costs), but I'm okay sacrifici…

The pyramids wern't built by slave labour.

https://en.wikipedia.org/wiki/Egyptian_pyramid_construction_...

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

#95

Post by lmm »

moomin wrote: post #72

I'll pick out a thread here: the toxic culture. When businesses fail, it's regarded as obvious that the toxic culture contributed to the downfall. With successful businesses like Uber or some bank you recently read about, it's assumed that somehow these behaviours are what makes the companies profitable. My own theory is that toxic culture is a drain on every company with one, like a parasite on a host organism. Some…

How do you propose to test your theory?

I don't know what you're defining as "toxic", but I've found that the worst companies I've worked for have been very "positive attitude", process-heavy, and diverse, and made a lot of bad decisions because no-one wanted to call them out as bad. The better companies I've experienced have a kind of skeptical, even caustic, culture that lets bad ideas get shot down quickly.

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

#96

Post by pryelluw »

spaceflunky wrote: post #88
pryelluw wrote: post #79

Earlier quoted context omitted.

Which will probably work out in her favor. Big failures can be used to build up a following. Im not criticizing her, just saying that a failed business does not equal a failed personal brand (unless you pull an OJ Simpson).

For the betterment of humanity, let's hope not. Lest we create another DJT.

I don't know the lady herself or know much about NG, but villifying her like this is silly.

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

#97

Post by wpietri »

tedmiston wrote: post #93
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…

Was it really ever an $85M business if it never technically made money? (Per EBITDA)

Yes. When people size a business in dollar terms I think they're usually talking about revenue. Because a) it's a clear, concrete measure, b) it's indicative of consumer demand, and c) it allows you to ignore all of the gross and subtle factors that influence profit. (I think the second-most common way to use the phrase is in market cap terms, but that only works well for publicly traded companies.)

For example, consider this chart of Amazon's revenue versus profit:

http://static2.businessinsider.com/image/56abe654c08a80431d8...

By revenue, Amazon's $136bn company, which I think gives a useful measure of their size. But their profit has always been relatively small, and in many quarters it was negative. Why? Because they think they have better things to do with the money than putting in the bank and/or giving it back to investors.

I think it's an especially good measure here because potential acquirers are going to start with revenue when figuring whether looking into Nasty Gal is worth their time. The mentioned competitor, Boohoo, has revenues circa $240m. So a fire-sale acquisition would be an opportunity to increase sales by circa a third, skipping a lot of the hard work of finding new customers. There are obviously plenty of complications, but it's a good first cut.

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

#98

Post by wehadfun »

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…

I feel like it is common that when a female ran company blows up somehow their public profile gets is blamed/mocked. This seeme to be the case here, I remember it with that one company that blew up last year, and the biggest one is the lady running Theramos.

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

#99

Post by jdmichal »

edshiro wrote: post #70
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…

Thank you for the insights into the company. I don't know whether this is common in VC backed companies, but I am surprised at the lack of governance around spending of company money for personal gain. 500K on a ghostwriter when you are trying to steady the ship and then make it move full steam ahead??! That sounds insane and if I were an investor I'd kick that CEO's ass. Moreover, very surprised Index Ventures poure…

I'm pretty surprised at that personal spending on the company dime also. That's the kind of thing that pierces the veil and can get you personally liable for company actions and debts... Which might very well come out to play in bankruptcy court.

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

#100

Post by wpietri »

narrowrail wrote: post #60
adventured wrote: post #57

Earlier quoted context omitted.

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

I've been in SF since 2000, and I don't think I've ever heard anyone say, "I took VC", and Google doesn't show much in the way of that. What's your source?
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