Boohoo.com $20 million offer for Nasty Gal moves forward

 

Boohoo.com plc’s $20 million offer forNasty Gal will move forward with no additional bids on the table for the Los Angeles-based firm.

Boohoo put in its offer for the company’sintellectual property and customer datain late December, becoming the stalking horse bidder in a potential auction. The offer did not include the company’s two Los Angeles area store leases. A deadline for any other interested parties to submit bids was set for last Thursday, with more than 200 notices sent to interested groups. However, with no additional qualified bidders stepping forth, a bankruptcy auction is no longer necessary.

Nasty Gal at its peak had at one time been valued at $200 million, attracting interest from retailers such as Urban Outfitters. But its own rapid growth appeared to be a hurdle the business was unable to clear with operational challenges that strangled the business.

Nasty Gal’s chief restructuring officer Joe Scirocco valued the company in its bankruptcy court documents at $25 million. The company had net revenue of $77.1 million for the 12 months through January, which was off about 9 percent from a year earlier. The business saw negative earnings before interest, taxes, depreciation and amortization of $15.4 million for the same period. That’s widened from negative $6.3 million of EBITDA in the previous fiscal year.

A hearing for court approval on the sale to Boohoo is scheduled for Wednesday, with a closing expected by the end of the month, according to a statement from Boohoo. The company said the purchase will be financed with cash and a loan.

Nasty Gal filed for bankruptcy protection in November. The filing was followed up less than two weeks later with Boohoo’s registration of the business name Nasty Gal Ltd., fueling speculation of a purchase. That was later confirmed with the announcement of the company’s purchase offer for the IP in a move that will give Boohoo a significant toehold in the U.S. market as it seeks to grow its business internationally.

see original article at women wear daily http://wwd.com/business-news/retail/nasty-gal-cancels-auction-boohoo-to-buy-business10777695-10777695/

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