Nasty Gal Files for Bankruptcy

Nasty Gal filed for Chapter 11 bankruptcy protection in the Central District of California on Thursday. The move is designed to enable the L.A.-based company to “address immediate liquidity issues, restructure its balance sheet and correct structural issues, including reducing high occupancy costs and restoring compliance with debt covenants,” the company said in a statement. Nasty Gal was founded 10 years ago by Sophia Amoruso, who stepped down as CEO in January 2015, who got her start selling vintage clothing on eBay.

Total Retail’s Take: Rumors had been going around for a few months now that Nasty Gal was on the hunt for a buyer. In February, the retailer laid off 10 percent of its employees to save on costs. And in 2015, former Nasty Gal employees sued the company for allegedly being fired once they became pregnant. Hopefully this bankruptcy filing will enable Nasty Gal to restructure its business so that it can once again operate profitably.