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Nasty Gal to trim headcount by 10%

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(Credit: Gary Friedman/Los Angeles Times via Getty Images) Sophia Amoruso, founder and CEO of Nasty Gal, is photographed in the photo studio at the company headquarters in downtown Los Angeles on August 14, 2012. Nasty Gal, an e-commerce website founded six years ago by Sophia. She was a college dropout and now the company is headed for more than $100 million in revenue this year. The 28-year old has become a tech darling even though she's a first-time entrepreneur who most recently was checking student ID's at a college dorm. Nasty Gal moved to downtown last year from San Francisco and is rolling out its own branded line of clothing in a few weeks. Sophia Amoruso, founder and CEO of Nasty Gal, is photographed in the photo studio at the company he
February 6
11:24 PM 2016

As part of its strategic restructuring, the US-based fashion retailer Nasty Gal is slashing 10 percent of employees. The layoff is being implemented across several departments. Nasty Gal is also facing legal cases filed by retrenched employees against layoffs. 

Sophia Amoruso established Nasty Gal in 2006 as an eBay store. It rose gradually from a spot for Amoruso to flip vintage clothes to $100 million business entity of edgy fashion. Nasty Gal commenced selling clothes on its own private label from 2012 onwards. 

Bloomberg reports that the cuts in staff numbers come after Nasty Gal raised $16 million funding round from Index Ventures and former JC Penney and Apple executive Ron Johnson. The total raising reached to $65 million. Earlier also, the Los Angeles-based fashion retailer reduced the headcount by 10 percent in 2014. 

The Chief Executive Officer Sheree Waterson said: "The market in which we operate is changing both in retail broadly and apparel specifically." About 19 employees from different departments have been fired. The business journey of Nasty Gal underscores the difficulties for a mature e-Commerce startup, transition from being a hot new brand to developing a traditional retail business. 

The fashion retailer with a focus on women's clothing is pruning the costs of production amid rising market competition. The uncertainty in retail environment and financing aspects are also forcing Nasty Gal to reduce the costs by downsizing the number of employees, according to RE/Code.  

Several former employees, who have been laid down by the company, have moved courts against Nasty Gal. The former employees allegedly criticize the company for disability discrimination and illegal firing of pregnant women. And Nasty Gal has termed the legal disputes with workers as "frivolous and without merit."

JEZEBEL reports that most of the retrenched employees were from technology, production and creative teams. Waterson further says: "While this was a difficult decision to make, it's necessary and will allow us to continue to evolve as a company." The several former workers said that the company has become an extremely dysfunctional place to work. 

Waterson, a former executive at Lululemon, took over for Amoruso in 2015. Waterson in the staff memo of Nasto Gal, said that "we have seen other tech and apparel brands make similar types of business decisions recently. It's imperative for us to be nimble and think strategically about the future of our brand." Of late, Nasty Gal is facing competition emerging from new entrants such as Dolls Kill and Ruche.  

The clothing range of Nasty Gal includes lace, ultra-short rompers and necklines. Nasty Gel has collaborated with Courtney Love for developing a collection by the grunge musicians' outfits. Of late, Nasty Gal among other e-Commerce fashion sites is facing competition from fashion industry majors such as H&M and Zara.  

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