Nasty Gal Melrose Avenue

LONDON — What’s in a domain name?

For a site like Boohoo.com, which is eyeing the failing Nasty Gal, half-a-million potential new customers.

Last week, as reported, Boohoo.com, the Manchester, England-based fast-fashion web site that caters to 16- to 24-year-olds, registered a new company, Nasty Gal Ltd., in the U.K. less than two weeks after the Los Angeles digital brand filed for Chapter 11 in California.



With speculation mounting that Boohoo might be poised to acquire the failing business, industry sources say the British online retailer could be mulling a number of options — including buying Nasty Gal’s domain name and database for a knockdown price so it can redirect valuable U.S. traffic from that site to Boohoo.com.

It’s not an uncommon strategy: In 2014, after the British online retailer My-wardrobe.com ceased trading, the site’s customers were redirected to the-then Net-a-porter group’s web sites after the company acquired some of My-wardrobe.com’s assets.

Net-a-porter bought the My-wardrobe URL, but at the time confirmed it did not acquire My-wardrobe.com or any of its liabilities. Although no price was mentioned, it is thought the URL was purchased for 1 pound, or about $1.25 at current exchange, following the company’s collapse into administration.

While it would not be difficult for Boohoo to operate another brand, the more attractive aspect would be the buildout of the customer profile Stateside, said Peel Hunt partner and retail analyst John Stevenson.

“They [Boohoo] now have a handful of target markets where they are focusing their efforts and their marketing and that would include the U.S., Australia and the U.K.,” Stevenson said. “They tried pop-up stores. They’ve done a college tour….It’s anything that they can do to really build the brand. That is the name of the game now. For them it’s about the Boohoo brand. They’re after the customer profile.”

On Wednesday, a spokesman for Boohoo declined to comment on whether the company was preparing to purchase Nasty Gal. He also declined to say why the company had registered the name Nasty Gal Ltd. in the U.K.

A source familiar with Boohoo said the company has “a passing interest” in Nasty Gal’s Chapter 11 process.

Investors were underwhelmed by the unfolding story, with shares of Boohoo.com broadly flat during the day, closing at 1.25 pounds, or $1.56, on Wednesday.

Although both sites boast a similar customer base and high-street pricing, Nasty Gal has a vintage element and focuses on women’s wear. Boohoo, which says it aims to be “the best-priced brand in fashion,” with more than 20,000 styles on offer, has of late launched men’s wear and maternity.

Later this year it will introduce a range of children’s clothing for 5- to 7-year-olds.

Industry sources say Boohoo is clearly evaluating all of its options. Registering the Nasty Gal name in the U.K. could also be a defensive move in case a third party buys the bankrupt company and decides to expand the label in the U.K.

Launched in 2006, by Mahmud Kamani and Carol Kane, the label is sold in more than 100 countries and Boohoo has ambitions to expand — and capture more of the U.S. audience.

It is also mulling an acquisition of another online retailer, Pretty Little Thing, with the option to buy that business open until March.

In April, Boohoo launched a shopping app for the American and Australian markets. In the last fiscal year, sales generated outside of the U.K. made up 33 percent of the total, with traffic from its mobile offering accounting for 66 percent.

Boohoo’s growth is in the double digits, with the company projecting revenue to spike 30 to 35 percent, reflecting tougher second-half comparatives. In the second half, it said it was looking to improve “customer lifetime value,” and would be making significant investments in IT and e-commerce.

In the six months to Aug. 31, revenue was up 40 percent to 127.3 million pounds, or $177 million, while profits were 11.3 million pounds, or $15.7 million. All figures have been converted at average exchange rates for the six-month period.

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