Once described as the “Cinderella of tech,” Nasty Gal founder Sophia Amoruso parlayed an eBay used clothing store into a fast-growing $85 million online business. But this fairy tale did not end happily: The once-trendy etailer hit a wall, filed for bankruptcy, and ended up selling its brand to Boohoo.com of the U.K. for just $20 million.
End of story.
In case you don’t recognize Amoruso’s name, this might jog your memory: She’s also the author of the 2014 New York Times bestseller #GirlBoss, host of a popular podcast and executive producer of a Netflix TV show in development, all bearing the same brand: GirlBoss.
Don’t feel too bad for the 32-year old entrepreneur; she will land on her feet. But I doubt if the venture capitalists who invested $64 million in the company or the nearly 200 employees at its soon to be shuttered Kentucky distribution center, L.A. retail stores, and lavish corporate headquarters, feel as good about the outcome.
Rags-to-riches-to-rags stories are certainly not uncommon in the topsy-turvy entrepreneurial world. And ever-changing consumer tastes and demands make success in online retail particularly difficult to sustain. Nevertheless, the Nasty Gal saga provides four key takeaways that resonate across the business realm.