Thursday, January 20, 2022

Boohoo confirms rumours it is eyeing US retailer Nasty Gal

Nasty Gal France

UK online retailer Boohoo has confirmed it has started a sale process to acquire certain intellectual property assets from US-based retailer Nasty Gal for £16.2 million.

Pending US court approval on January 5, Boohoo subsidiary Boohoo F I Limited has been appointed as the “stalking horse” bidder for the Nasty Gal brand and customer databases, in accordance with Section 363 of the United States Bankruptcy Code3.

A “stalking horse” bid is a deal designed to test the market, ensuring that Nasty Gal receives the maximum amount of money for its assets once it officially goes to auction, which would consist of a court-approved bidding process lasting at least a month.

This means Boohoo‘s bid may not be successful if Nasty Gal receives higher or more favourable offers during this process.

READ MORE: Boohoo acquires Pretty Little Thing in £3.3 million deal

The news comes after Nasty Gal filed for Chapter 11 bankruptcy in November, announcing it could not pay back its creditors.

Boohoo said Nasty Gal would “complement” its own brand and the deal would accelerate the Manchester-based retailer‘s international growth, especially in the US.

“Should we be successful in acquiring Nasty Gal it would represent a fantastic opportunity to add such a well-established, global brand to the Boohoo family,” Boohoo joint chief executives Mahmud Kamani and Carol Kane said.

In the year ending February 1 2016, Nasty Gal delivered net revenue of $77.1 million USD but made a net loss after tax of $21 million USD after operating costs.

In December, Boohoo acquired 66 per cent of young fashion brand PrettyLittleThing for £3.3 million.

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