Boohoo has started a sale process to acquire certain intellectual property assets from US retailer Nasty Gal for $20m (£16.2m).
In November Boohoo filed a certificate of incorporation for the US young fashion retailer after it filed for Chapter 11 bankruptcy.
Subject to US court approval which will be sought on 5 January 2017, Boohoo’s subsidiary, Boohoo F I Limited, will be appointed as the “stalking horse” bidder for the Nasty Gal brand and customer databases, in accordance with Section 363 of the United States Bankruptcy Code3.
The sale of the Nasty Gal assets will be overseen by a court approved bidding process lasting at least 30 days. The Group’s bid may not result in a transaction if higher or more favourable offers are obtained by Nasty Gal during the auction process.
Boohoo said Nasty Gal would “complement” its own brand and the deal would accelerate the group’s international growth, particularly in the US, building on Boohoo’s existing customer reach and product range.
Nasty Gal delivered net revenue of $77.1m (£62.7m) in the year ended 1 February 2016. This included revenue from vintage clothing and third party brands, which are excluded from the proposed sale. The Company made a net loss after tax of $21m (£17m) after operating costs.
The proposed deal relates to the acquisition of intellectual property assets only and excludes all operating costs.
Mahmud Kamani and Carol Kane, joint CEOs of Boohoo, 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.”
Earlier this month Boohoo acquired 66% of young fashion brand PrettyLittleThing for £3.3m.