Nasty Gal’s Nasty Struggle

Remember when we discussed a growing trend in Fast Fashion, Quicker Violations? Well, we have some updates that we think you’ll find interesting!

Although the fast fashion industry is expanding and becoming increasingly saturated, many retailers still find difficulties prospering in such an environment. Fast fashion retailer Nasty Gal is one of these companies. Having gained a large growth in popularity within its first few years as an online retailer, and then expanding its business practice to physical stores in Los Angeles, Nasty Gal seemed to be on the road to success. However, this past November, the company filed for bankruptcy after losing $21 million in its last financial year.

There is never a shortage of brands ready to take advantage of failing companies, especially in the highly-saturated fast fashion industry. Boohoo, an online retailer based in Manchester, England, is bidding $20 million for the brand and customer list of Nasty Gal. Boohoo targets fashion-conscious youngsters (16-to-24-year-olds), and has been extremely successful, having had its shares soar nearly 260 percent in 2016. A lot of Boohoo’s success can be attributed to its structurally similar market practice to fast fashion giant, Zara. One advantage over Zara, however, is the fact that through solely selling online, Boohoo can more quickly collect data on what products are trending, which reduces lead times to only one or two weeks.

As mentioned in previous posts, one aspect of the industry that we, as two fashion-conscious law students, struggle with, is the environmental and labour exploitations often occurring within large multi-national corporations within the fast fashion industry. In order to reduce lead times and efficiently gain popularity amongst their target market, companies often violate laws, regulations, and codes. If the industry continues to grow as it has within the last decade, who knows the potential illegalities that may occur in the future?

Surprisingly, recent studies have alluded to the fact that the fast fashion industry is, in fact, struggling. Within this past year, H&M’s profits are down and American Apparel has filed for bankruptcy. Still, however, companies are bidding on Nasty Gal’s brand and influence in order to give them a greater impact and reach within the industry. So, what exactly does this mean for the fast fashion industry? Are these signs of a slight struggle legitimate, or will it go through cycle in which it will and can easily regain profits?

Whatever the case, we just hope that fast fashion companies understand the legal implications of their actions on both an environmental and labour level. We love unprecedented looks, but not at the cost of legal and ethical violations – dignity wears well with a chic style.

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