Brinen & Associates

In-House General Counsel Services for your Company

Contact us today at (212)330-8151

  • About Us
    • Joshua D. Brinen
    • Martha Thrush
  • Practice Areas
    • Transactions and Corporate Law
    • Securities & Finance
    • Tax Planning and Controversy
    • Commercial Litigation
    • Commercial Real Estate
  • How We Can Help
    • Forming Your Company
    • Financing Your Company
    • Operating Your Company
    • Hiring Independent Contractors and Employees
    • Growing Your Company
    • Defending Your Company
  • Blog
  • Contact Us
You are here: Home / Operating Your Company / Learn From Nasty Gal’s Mistakes

Learn From Nasty Gal’s Mistakes

March 7, 2017 by Joshua Brinen

“I’m a creative. I’m a brand-builder. I’m a rainmaker. I’m a pretty good marketer, but that’s not something I want to do every day.” – former Nasty Gal CEO, Sofia Amoruso

“Play to your strengths” and “know your limits” are phrases that get tossed around often. nasty gal's mistakesYoung entrepreneurs should do well to remember them, though, as their companies generate revenue and expand. The business owners with stars and dollar signs in their eyes may be well-intentioned, but their inexperience and impatience could be a disastrous combination.

Case-in-point: Nasty Gal Inc. filed for Chapter 11 bankruptcy in late 2016 and last week, its brand name and its intellectual property were acquired by UK-based competitor, Boohoo for $20 million. That may sound like a good deal for a used clothing company that started as an eBay retailer page, but it’s obviously not a successful ending for its employees or its investors.

The vintage clothing retailer started online in 2006 by Sofia Amoruso. The CEO was 22 years old at the time, and she wisely met a demand in the market for inexpensive, vintage clothing and was able to expand her shop beyond an eBay page. A devout customer base followed her as she formed Nasty Gal, hired employees, opened two California retail stores, and a Kentucky distribution center.

Insta-celebrity was achieved about three or four years ago, during a time when she should have been focused on the company’s success. Instead, she wrote a bestselling memoir, #GirlBoss, (the jury’s out on whether it’s actually a good read) and began developing a Netflix show based on it. This was a really bad time to go belly-up, because the show could’ve attracted a much broader customer base for Nasty Gal, and it’s probably the only reason Boohoo bought its IP.

The Inevitable Fall

The company peaked in 2014, when it reported $85 million in revenue. Around that time, all Amoruso’s extracurricular activities were in motion and that undoubtedly correlated to the business’s downward spiral. The vision was being blurred by an unfocused company leader. The sales were negatively affected, and ultimately, according to Dow Jones:

Within the company, turnover and layoffs across ranks weakened morale, former employees said. In 2015, Ms. Amoruso ceded her role as chief executive to former Lululemon executive vice president Sheree Waterson, who had joined Nasty Gal in 2014 as president and chief product officer…

Shoptalk retail analyst Sucharita Mulpuru said Ms. Amoruso should have handed over the reins sooner.

“You can be a fantastic designer and marketer and create a brand that resonates with people, but that doesn’t mean you can successfully manage the business part of your company,” she said.

The Takeaway

You might be able to effectively run a company from a small or virtual space, but if you’re not prepared for major expansion, hire someone with proven business sense to take the company to the next level. Don’t let your private endeavors or short attention-span take priority over your company’s success. If you cannot handle the daily activities of a company leader, find someone who can.

You can remain the face of your company without being the no. 1 person in charge. If your ego and shareholders allow it, stick around to guide the company along and more importantly, learn from the person you’ve hired to steer the ship. By co-piloting, you might learn enough to regain total control.

Contact Brinen & Associates to discuss a strategy for bringing aboard an officer who can help your company reach the next level of success.

 

Related Posts

  • Small Businesses Need Continuity Plans, Too
  • Knowing When To Double Down
  • Lessons From A Vinyl Shop Owner
  • First Days in Mnuchin Land
  • Welcome To Mnuchin Land

Filed Under: Operating Your Company Tagged With: lawyer, small business, small business owners

Private Companies Services

  • Corporate Formation and Governing Documents
  • Corporate Governance and Corporate Management
  • Shareholder Agreements and Buy-Sell Agreements
  • Corporate Transactions
  • Tax Planning and Controversy
  • Corporate Planning
  • Corporate Structuring for Outside Investment
  • Structuring of Equity Compensation for Key Participants
  • Operating Agreements and Partnership Agreements
  • Disposition and Dissolution
  • Commercial Litigation

Practice Areas

  • Transactions and Corporate Law
  • Securities & Finance
  • Commercial Litigation
  • Commercial Real Estate
  • Estate Planning & Administration

Contact Us

Fields marked with a * are required.

Frequently Asked Questions

  • How do you merge an Limited Liability Company and a corporation?
  • I have a DE corporation with offices in NJ and NY. Most of our business is conducted in NJ, but we are headquartered in NY. Do we need to file taxes in all three states?
  • For corporations, which jurisdiction has the lowest state taxes?
  • What tax benefits are there to forming a trust rather than a will?
  • I am interested in forming a non-profit corporation in NY; can I be the sole shareholder and director?

CONTACT US

Brinen & Associates
90 Broad Street, Second Floor, New York, NY 10004
URL of Map
Phone: (212)330-8151
  • Facebook
  • LinkedIn
  • Pinterest
  • Twitter

Practice Areas

  • Transactions and Corporate Law
  • Securities & Finance
  • Tax Planning and Controversy
  • Commercial Litigation
  • Commercial Real Estate
  • Estate Planning & Administration

FAQ's

Clients often come to us with some basic questions or problems to solve. Maybe they are entrepreneurs about to start a new business. If so, there are some threshold issues that need to be resolved about the right kind of company to set up and where it should be located. Or maybe it’s an individual who is beginning to think about writing her will. So we have prepared a few FAQ’s covering the type of inquires that we hear most frequently from clients and prospective clients.

READ OUR FAQs
©2020 Brinen & Associates, LLC - All Rights Reserved. | Disclaimer | Developed by Good2bSocial
logo
  • About Us
    • Joshua D. Brinen
    • Martha Thrush
  • Practice Areas
    • Transactions and Corporate Law
    • Securities & Finance
    • Tax Planning and Controversy
    • Commercial Litigation
    • Commercial Real Estate
  • How We Can Help
    • Forming Your Company
    • Financing Your Company
    • Operating Your Company
    • Hiring Independent Contractors and Employees
    • Growing Your Company
    • Defending Your Company
  • Blog
  • Contact Us