The situation for Nasty Gal may have left a bitter taste in some of its employees' mouths, 10 percent of whom have been laid off.
Re/code shares part of an email sent by Sheree Waterson, CEO of the online fashion retailer, explaining to the company that 19 employees from multiple departments were let go because the “market in which we operate is changing, both in retail broadly and apparel specifically.”
Noting that Nasty Gal — which has two physical locations (both in the Los Angeles area, where the company is based) in addition to its online presence — had previously made staff cuts in 2014, Re/code finds the recent layoffs as being reflective of the difficulty that online brands can endure as they attempt the necessary expansion from hot startups to more traditional retail operations. Birchbox, the outlet shares, is another online shop that had to recently cut its staff as investor confidence in many once-promising retail startups wavers.
Waterson took over the role of Nasty Gal CEO from Founder Sophia Amoruso early in 2015. Amoruso, who launched the brand in 2006 as a vintage shop on eBay, turned Nasty Gal into a $100 million business with help from its popularity among millennial women and strong social media presence (Re/code shares that Nasty Gal has more than 1 million Facebook followers and twice that amount on Instagram).
While Amoruso declined to share 2015 sales figures for Nasty Gal, she did tell Re/code: “We believe that future growth comes from being where our customer is, and that is not purely online. We have two stores and a lot of room to grow."