A tale of woe – Nasty Gal

A photo by Nasty Gal features black text reading, "Owners often want to evolve and grow their business - but factors like timing, customer buying habits, and trends need to be carefully considered before expanding."

Too often, a company’s story serves as a cautionary tale for other business owners. This is the case for the popular women’s brand Nasty Gal.  This past November the company filed for bankruptcy after bursting onto the scene in 2006 as an eBay based business that used MySpace as their main marketing tool.
The company found it’s niche by reselling vintage clothing and jewelry to those seeking the ‘gritty cool girl’ style, based on founder, Sophia Amoruso’s own taste.
So where did they go wrong?

  • The Nasty Gal brand was synonymous with Amoruso, with her personality and style launching the brand into the national spotlight where growth soon became explosive. Amoruso remained in the role of CEO until 2015. Entrepreneurs often struggle to function in the CEO role and get tangled up in the day to day minutia that takes them away from the big picture thinking, where they are best utilized. With Amoruso at the helm, the company had several lawsuits filed against them and a host of other management issues, according to The New York Times.
  • The brand also grew very quickly and needed more investment capital, to keep up with demand. This included the addition of several brick and mortar stores to support online efforts. Knowing your customer base and their buying patterns is key to any business’ success. With the addition of the retail stores, operating costs skyrocketed and in-store sales never took off.  A reminder that sometimes a company’s core business model is truly the best.  Owners often want to evolve and grow their business- but factors like timing, customer buying habits and trends need to be carefully considered before expanding.
  • Culture also became a growing issue at Nasty Gal, with constant turnover and several workplace lawsuits being filed. Culture will make or break a company, yet most businesses refuse to make it a focus and leave it to chance.

When a company grows and grows and grows it becomes increasingly hard to stay true to your brand and roots. Growth should be intentional and should be dictated by your customers. It is so important that owners entrepreneurs and business owners understand their strengths and play to them.
Sources: New York Times, Forbes

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