Nasty Gal clothing company — as red-hot as its founder’s lipstick
Sophia Amoruso doesn’t care if you’re offended by the name of her company.
“If it’s a big shock when you hear it,†she says, “you’re probably not our customer anyway.â€
She’s earned the right to be dismissive. Amoruso, 28, is the founder and chief executive of Nasty Gal, a fast-rising e-commerce site that has managed to keep a low profile despite a cult following of young women who can’t get enough of the company’s edgy and provocative clothing.
Sales rocketed 10,160% from 2008 to 2011, making Nasty Gal the fastest-growing company in Los Angeles and the fastest-growing retail company period, at least according to the Inc. 5000 list released this month. After securing a $9-million investment in January from Index Ventures, which has also backed Facebook and Etsy, Nasty Gal just scored an additional $40 million from the venture capital firm.
That would be hugely impressive for any 6-year-old start-up. But Amoruso isn’t your typical entrepreneur.
She’s a community college dropout who has never taken a business or fashion class and admits she doesn’t know how to make a PowerPoint presentation. Nasty Gal, expected to bring in more than $100 million in sales this year, is her first company. Previously, she was checking student IDs in the lobby of an art school for $13 an hour.
With slightly unkempt hair, bright red lips and a daring sense of style, Amoruso is, employees say, the ultimate nasty gal. Much of what the brand sells is a reflection of her own fashion whims.
“There is not an ounce of pretension about her,†said Deborah Benton, who left Kim Kardashian’s start-up ShoeDazzle in June to join Nasty Gal as president and chief operating officer. “That core value of authenticity — it comes through loud and clear in the brand.â€
In a predominantly male tech industry, Amoruso is gaining notice for being a young female CEO who is doing things her way, showing up for a recent interview at the company’s downtown headquarters in precariously high Alexander Wang platform boots, sparkly lime-green nail polish and a strapless tie-dye leather mini dress ($368 on NastyGal.com). A small tattoo of a bird on her torso peeked out from the plunging sweetheart neckline.
Amoruso named Nasty Gal after a 1975 album and song by funk singer and style muse Betty Davis. On its website, the company calls Davis “the patron saint of badass women ... complete with lamé platform thigh-high boots.â€
So it should come as no surprise that Nasty Gal isn’t for the prim-and-proper set. The clothes are sexy, eclectic and a bit offbeat, like a pair of black leggings with a sheer panel running from waist to ankle ($48), a white shredded knit sweater ($68), skinny jeans with lace-up corset sides ($88) and a confetti sequin bustier ($138).
Most items are under $100, with profit margins of more than 60% because of a business model that rarely includes discounts. “It’s not a message we want to send,†Amoruso said.
Even in this economy, shoppers don’t seem to mind.
In 2009, Nasty Gal pulled in $1.1 million in sales. A year later, revenue jumped to $6.5 million, and then to $28 million in 2011. This year the company is on track to exceed $100 million in sales, a prospect that Amoruso, with her trademark candor, called “totally weird and freakish.†The company, she added, is debt-free and has been profitable from the start.
Until now, Nasty Gal has sold only vintage finds or clothing from outside vendors such as Jeffrey Campbell, Shakuhachi and UNIF. But on Monday it will release its first collection, featuring tops, bottoms, dresses, sweaters, bodysuits and denim starting at $68. The e-tailer dubbed the line “Weird Science†in a nod to its digital roots.
The 26 Nasty Gal-branded products, designed by Amoruso and shot by notorious fashion photographer Terry Richardson, draw from “a scope of influences as disparate and iconic as bondage wear to the lore of the Internet,†the company says.
About 70% of the collection, including all of the denim, will be made in Los Angeles — a coup for struggling apparel factory owners who have seen orders fall in recent years as clients turned to cheaper manufacturing overseas.
Nasty Gal is also releasing a lifestyle magazine, Super Nasty, in September that will feature spreads on fashion, music and culture, and will be included free in customers’ orders. Amoruso is editor in chief.
The moves are part of an ambitious plan to grow the Nasty Gal business after the two rounds of funding by Index, a European venture capital firm.
Index general partner Danny Rimer said the firm saw a promising young start-up in Nasty Gal and liked that the company wasn’t resorting to gimmicky retail tactics like daily deals, monthly subscriptions or Hollywood partnerships.
“Girls are really addicted to the website and the clothes,†he said. “It’s more challenging to build a long-term business model based not on discounting and on celebrity endorsements, but rather just the quality of your product.â€
Another selling point was Amoruso.
“She has unbelievable instincts,†Rimer said. “Few folks with all the degrees in the world could have built Nasty Gal into what it is today.â€
For all its raunch, Nasty Gal’s success came the old-fashioned way.
Amoruso was born in San Diego and grew up in Sacramento, the only child in a middle-class family. When her parents divorced during her senior year of high school, she moved out and crashed with a group of friends. She briefly attended a San Francisco community college and, after jumping from job to job — including working at two photo labs, a record store and as a shoe saleswoman — began selling vintage clothing on EBay in 2006.
An amateur photographer, Amoruso shot images of the items she was selling and occasionally modeled some of the clothes herself. To gauge what was popular, she would check out other sellers’ completed auctions to see what had sold and for how much.
On weekends, she’d trawl flea markets, estate sales, vintage shops and thrift stores looking for hidden treasures, such as a vintage Chanel jacket she discovered in a Salvation Army clothes bin for $8. She sold it for $1,050.
“I dug deep in really dirty places for awesome things,†she said recently from her office, sparsely decorated with an orange sofa, Polaroid photos and a Vogue coffee table book. “The mall was not a place that spoke to me.â€
Her EBay store did so well that a year and a half later she decided to launch a stand-alone website and began touting the URL NastyGalVintage.com in her feedback to customers. That got her kicked off the popular auction site, she said.
For years, Amoruso boot-strapped Nasty Gal on her own from a studio in Benicia, Calif., taking a substantial risk starting a retail venture during the recession. She expanded her selection to include non-vintage items and continued packaging and shipping orders herself. Every few months she would drive six hours to Los Angeles to pick up boxes of merchandise that she’d haul back to the Bay Area.
And at a time when many retailers hadn’t yet embraced social media, Amoruso was using Myspace to promote her latest items. Today the company says its growth has been driven mainly by word of mouth and its active online presence on Facebook, Twitter, Instagram, Pinterest and Tumblr.
With business booming in early 2011, Amoruso moved Nasty Gal to Los Angeles to be closer to her vendors; she also felt L.A. better captured the company’s aesthetic.
She leased a sunny office space with exposed brick near Pershing Square, where employees in tiny shorts work amid a maze of clothing racks, free-roaming dogs and Ryan Gosling posters.
Nasty Gal’s typical customer is 18 to 24 years old and lives in L.A. or New York, although more than a third of the company’s sales come from international markets — despite no overseas advertising budget. The site gets 5 million visits a month and has sold to more than 350,000 customers in 60 countries; half of Nasty Gal’s orders come from repeat customers.
These days Amoruso lives in Los Feliz with her boyfriend and, despite being one of the most talked-about rags-to-riches tech entrepreneurs in town, rarely ventures to the Westside to mingle with what she calls the “boys club†in so-called Silicon Beach. She’s made a few splurges — including a white Porsche that she paid for with cash and a pair of silver-spiked Christian Louboutin heels — but has kept her down-to-earth, modest vibe.
For a girl who never had corporate ambitions, Amoruso says managing the rapid growth of Nasty Gal has been her biggest challenge. Last year, during the height of the holiday season, a software glitch on the company’s newly redesigned website allowed orders to be placed for out-of-stock items; Nasty Gal had to cancel hundreds of purchases as a result, she said.
With Index’s help, Amoruso created an options pool for employees and put a formal management team in place. Today Nasty Gal has more than 150 employees — 70% of them women — including some lured away from Urban Outfitters, Zappos, Juicy Couture and Wal-Mart. It is outgrowing its L.A. headquarters already and plans to move to a new downtown space early next year.
Nasty Gal’s success has led to questions about whether the company should take its brand into pop-up shops or bricks-and-mortar stores. Although nothing is on the table, Amoruso says she’s not opposed to the idea. “I actually think it would be a blast,†she said.
But don’t expect a Nasty Guy any time soon.
“Well, it’s called Nasty Gal, for one,†she said. “I think one of the things that can dilute a business is when it goes in too many directions. I don’t want to be everything for everyone. I just want to be something awesome for our customers.â€
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