How Nasty Gal Went From an $85 Million Company to Bankruptcy

Online retailer’s swift growth led to stumbles; amid turbulence, a culture gone ‘toxic’

Nasty Gal, founded by Sophia Amoruso, at one time generated $85 million in revenue but is now poised to be sold to a rival following bankruptcy proceedings. WSJ’s Sarah Chaney explains on Lunch Break with Tanya Rivero. Photo: Getty

By Sarah Chaney
Feb. 24, 2017 5:30 a.m. ET

The rapid rise and fall of Nasty Gal Inc., an online retailer once popular with millennial shoppers and venture capitalists, is culminating in a bankruptcy sale to a rival.

In less than a decade, Nasty Gal founder Sophia Amoruso, 32 years old, transformed an eBay vintage store into a company that generated $85 million in revenue for the 2014 fiscal year.

But the Los Angeles company’s swift growth led to stumbles. Leadership turnover and poor communication hurt its bottom line, according to interviews with 10 former employees. Some described the company culture as becoming “toxic,” referring to turbulence in recent years including several rounds of layoffs.

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