Boohoo.com to buy Nasty Gal assets

Online fashion retailer Boohoo.com has entered into an asset purchase agreement to buy certain intellectual property assets from retailer Nasty Gal Inc – which filed for Chapter 11 bankruptcy in the US in November – for $20m.

Subject to US court approval, to be sought on 5 January, Boohoo's subsidiary, Boohoo F I Limited, will be appointed as the "stalking horse" bidder for the Nasty Gal brand and customer databases.

The sale of the Nasty Gal assets will be governed by a court approved bidding process lasting at least 30 days and Boohoo’s bid may not result in a transaction if better offers are obtained by Nasty Gal during the auction process.

Boohoo said the deal has the potential to accelerate its international growth, particularly in the US, building on its existing customer reach and product range across the globe.

Nasty Gal generated net revenue of $77.1m in the year ended 1 February 2016. This includes revenue from vintage clothing and third party brands, which are excluded from the proposed transaction.

The company made a net loss after tax of $21m after taking into consideration operating costs. Boohoo said the proposed deal relates to the acquisition of intellectual property assets only and excludes all operating costs.

Joint chief executive officers Mahmud Kamani and Carol Kane said: "Should we be successful in acquiring Nasty Gal it would represent a fantastic opportunity to add such a well-established, global brand to the Boohoo family. Following our recent acquisition of PrettyLittleThing.com we believe this would represent an ideal next step in inspiring an ever-growing range of young customers internationally."

Independent retail analyst Nick Bubb said: “With net revenue of $77m in the year ended 1 February 2016, Nasty Gal would be an apparently cheap deal, although it remains to be seen what the underlying scale of the business will be post-bankruptcy.”

At 0825 GMT, Boohoo shares were up 2.1% to 135p.