Question

Could Nasty Gal have avoided bankruptcy? Explain your answer.

Answer 1

American retailer Nasty Gal that specializes in fashion for young women founded by Sophia Amoruso in 2006 The company has customers in across 60 countries.Nasty Gal was named “Fastest Growing Retailer” in 2012 by INC agazine.

Nsty Gal is based in Los Angeles. The company was purchased by the BooHoo in 2017.

Yes nasty Gal avoided bankruptcy

1)plug your bucket :

Main problem at Nasty Gal is that customers werenot returning for repeat purchases reasons for “leaky bucket,” is ranging from quality product to the target brand narrow demographics, to competition from retailers offering a wider variety of products.

But the reasons behind Nasty Gal’s customer arenot important. At the end the bigger issue is that they werenot resolved and thus contributed to the company’s bankruptcy.

2)Don’t over-invest in infrastructure and overhead

Another reason Nasty Gal’s bankruptcy is over investment in infrastructure. InNasty Gal’s case, involved two brick-and-mortar stores, to a 500,000 square foot distribution center in Kentucky, toheadquarters visually stunning in downtown Los Angeles.

Opening a 50,300square foot location in downtown Los angels may be the last thing on your mind as a small ecommerce seller.

But that doesn’t mean that it isn’t possible to over-invest when lower the stakes.

3)pay attention to cash flow

Another main reason for nasty bankruptcy is donot pay attention to cash flow, sales of nasty Gal is downward from 100 $million to 85 $in 2014 anf 77$million in 2015 Falling sales compounded Nasty Gal’s over-investment in marketing and advertising.