Debenhams, the owner of the Nasty Gal brand, sold the women's fashion brand to the American company WSG Brands for nearly £12 million. This sale is in line with Debenhams' strategy to improve its financial situation and strengthen its balance sheet.
History of Nasty Gal and its Challenges
Nasty Gal was founded in 2006 as an online vintage clothing store by Sophia Amoruso and quickly became one of the recognized names in the fashion industry. In 2016, Amoruso was introduced as one of the wealthiest self-made women in the world. However, after that, the brand faced declining sales and costly lawsuits and ultimately, in 2017, Debenhams acquired Nasty Gal from bankruptcy for nearly £15 million.
Changes at Debenhams and New Strategies
Dan Finley, the CEO of Debenhams, described the Nasty Gal brand as a non-core asset and stated that the sale of this brand would help strengthen the financial balance sheet. He also noted that this sale is part of broader efforts to improve the company's financial situation. In recent weeks, Debenhams also sold its distribution center in Sheffield for £90 million to Primark.
Debenhams is moving towards a marketplace model where third-party brands can sell their products through its platforms. These changes began after Debenhams was acquired by the fashion company Boohoo in 2021 and the closure of the brand's physical stores.
According to Finley, this sale allows Debenhams to remove brands like Nasty Gal from its balance sheet and move towards greater efficiency. He also mentioned recent successes in improving profitability and expressed satisfaction with the speed and scale of these changes.
In recent years, Debenhams' younger brands, including Boohoo and PrettyLittleThing, have lost customers due to intense competition with low-cost online stores like Shein and resale platforms like Vinted. However, Debenhams has announced that Nasty Gal achieved sales of £12 million and a profit of £400,000 last year.
It remains unclear whether WSG Brands will be able to bring Nasty Gal back to its peak days. The brand has previously collaborated with celebrities like Emily Ratajkowski and Cara Delevingne, indicating its appeal in the fashion world. However, the existing challenges facing online fashion brands highlight the need for innovation and strategic changes more than ever.
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