“Our decision to initiate a court-supervised restructuring will enable us to address our immediate liquidity issues, restructure our balance sheet and correct structural issues including reducing our high occupancy costs and restoring compliance with our debt covenants,” Nasty Gal CEO Sheree Waterson said. “We expect to maintain our high level of customer service and emerge stronger and even better able to deliver the product and experience that our customers expect and that we take pride in bringing to the market.”
Throughout the restructuring process, Nasty Gal plans to explore strategic partnerships with other popular e-commerce brands. The company is also searching for a new equity partner to lead the company on a better financial path when it emerges from Chapter 11.
Nasty Gal will continue its day-to-day operations with employees and consumers under customary relief in the court. In addition, the company will consult the court with a plan that will grow its relationship with other key business partners and vendors. An official unsecured creditors committee will also be appointed to represent Nasty Gal’s interests during Chapter 11 proceedings.
This decision follows myriad internal issues. Earlier this year, Nasty Gal axed 10 percent off its staff as it transitioned to a more traditional retail business. In 2015, Amoruso stepped down as CEO and took over Nasty Gal’s creative operations, passing the reins to president Sheree Waterson. Former employees, including four pregnant women, also sued the company last year, alleging they were denied proper maternity leave.