Yikes: LA-Based Nasty Gal Files for Bankruptcy, Seeks Emergency Funding

The brand's seeking court approval to get emergency funding.

Photo: Scott Grover/Nasty Gal
Photo: Scott Grover/Nasty Gal

Los Angeles-based Nasty Gal is in financial trouble. The e-tailer-turned-IRL shop's attorneys have requested court approval to pull funds from a loan to keep its lights on, Women's Wear Daily reports.

The brand — which began as an eBay vintage shop founded by fashion powerhouse Sophia Amoruso — filed for bankruptcy on Wednesday and hopes that the emergency funding from Palo Alto-based lender Hercules Technology Growth Capital Inc. will "keep the business running and, at least in the short term, be able to make its next payroll Nov. 25," notes the fashion trade publication. The funds will be used to pay 189 employees and store expenses; Nasty Gal currently has brick-and-mortar shops on Melrose Avenue in West Hollywood and Third Street Promenade in Santa Monica.

If Nasty Gal is unable to secure court approval to access the funds, it may be forced to liquidate assets to keep operating. As WWD reports, the company "began actively searching for a buyer in May 2015 with the help of Peter J. Solomon but its declining business was a tough sell." It secured a $15 million loan from Hercules last year and another $5 million from Stamos Capital, according to WWD, "but the money did little to solve Nasty Gal's troubles."

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