An unlikely start-up success
Updated: 2013-04-14 08:06
By Nicole Perlroth(The New York Times)
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LOS ANGELES - If ever there was an unlikely entrepreneur, Sophia Amoruso might be it.
In 2006, Ms. Amoruso was a 22-year-old community college dropout, living in her step-aunt's cottage, working at an art school checking student IDs for $13 an hour. Then she started a side project, Nasty Gal, an eBay page that sold vintage women's clothing.
Last year, Nasty Gal sold nearly $100 million of clothing and accessories - profitably.
For the last seven years, Ms. Amoruso has been courting a cult following of 20-something women. Nasty Gal has more than half a million followers on Facebook and more than 600,000 on Instagram. But it is not yet well known beyond that base.
"People say: 'Nasty Gal? What's that?'" Ms. Amoruso, now 28, said at her new headquarters in downtown Los Angeles. "I tell them, 'It's the fastest-growing retailer in the country.'"
In 2006, she considered going to photography school, but didn't want to take on the debt. Instead, she quit her job and started an eBay page to sell vintage designer items she found in secondhand clothes bins. She bought a used Chanel jacket at one store for $8 and sold it for $1,000. She found Yves Saint Laurent clothing online by Googling misspellings of the designer's name.
She styled, photographed, captioned and shipped each product herself and sold about 25 items a week. She named the eBay page "Nasty Gal" after the 1975 album by Betty Davis, the unabashedly sexy funk singer and style icon.
Ms. Amoruso curated her eBay page to match her own style, which on a recent rainy day included a floor-length trench coat, vintage rock T-shirt, no-nonsense bob and blood-red lipstick.
She created a Myspace page to market Nasty Gal and garnered 60,000 "friends" by reaching out to fans of brands like Nylon, the music and fashion magazine. Every week, her finds ignited bidding wars from Australia to Britain. She enlisted friends to model and photograph her products. She moved Nasty Gal to a 157-square-meter studio in Berkeley, California, in 2007, and eight months later moved again, to a 700-square-meter warehouse space in Emeryville.
Ms. Amoruso also outgrew eBay and started ShopNastyGal.com. (She now owns the NastyGal domain name.)
Nasty Gal has no marketing team, but fans comment on its every Facebook, Instagram, Twitter, Tumblr and Pinterest post. A quarter of Nasty Gal's 550,000 customers visit the site daily for six minutes.
With Nasty Gal having made just shy of $100 million in revenue last year, analysts say they would expect a bigger audience. But Sucharita Mulpuru, an analyst at Forrester Research, said Nasty Gal's conversion rate must be higher than the industry standard of 3 percent. "It speaks to an engaged audience," she said.
Ms. Amoruso knew Nasty Gal couldn't grow by selling vintage items forever. In 2008, she posted an ad on Craigslist for a buying assistant and hired Christina Ferrucci, the first person who answered. The two experimented with buying vintage-inspired clothes from vendors in Los Angeles's fashion district. Soon, Ms. Amoruso and Ms. Ferrucci were making the six-hour drive to Los Angeles every other week. Ms. Amoruso moved Nasty Gal to Los Angeles in 2011, to be closer to her merchants and models.
Ms. Amoruso has partnerships with Sam Edelman and Jeffrey Campbell, two shoe brands. A Jeffrey Campbell spokeswoman said that Nasty Gal created a new channel for its more provocative styles, like the "Lita," a towering lace-up platform boot.
Last March, Ms. Amoruso gave a venture capitalist a slice of equity for $9 million. But by August, things were moving so quickly that she raised an additional $40 million and used some of it to build a 46,000-square-meter fulfillment center in Kentucky. Nasty Gal now attracts more than six million visits a month.
Urban Outfitters recently contacted Ms. Amoruso about a potential acquisition.
Some venture capitalists say Nasty Gal is playing on a short-term fashion trend that will be difficult to sustain.
Ms. Amoruso said she knows that it could all fall apart. Nasty Gal's motto is, "Nasty Gals do it better." But her personal motto is, "Only the paranoid survive."
The New York Times
(China Daily 04/14/2013 page10)