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Nasty Gal keeps growing up.
This story first appeared in the March 3, 2014 issue of WWD. Subscribe Today.
The rapidly evolving online retailer continues to bolster its executive ranks and to add more product categories to its in-house designed collections. In another major step, the brand is planning the opening of its first brick-and-mortar store.
The company, estimated to have sales close to $130 million last year, has brought on Sheree Waterson as president and chief product officer. Most recently, Waterson spent five years at Lululemon as chief product officer, a post she left shortly after the company’s high-profile recall in the spring of too-sheer yoga bottoms. At Lululemon, she spearheaded supply chain, merchandise and design during a period where the company saw significant growth.
“Lululemon did a really good job of managing that [the fabric issue]. They had a ton of changes of leadership — they have a new ceo,” Sophia Amoruso, Nasty Gal founder, chief executive officer and creative director, said of Waterson and her tenure at Lululemon. “She [Waterson] had a great run and she was there for five-and-a-half years and built an amazing business. I don’t look at much more than that.”
Waterson fills a role that previously had been held by Deborah Benton, Nasty Gal’s chief operating officer and president, who left the company last month. Waterson is the latest addition to an executive team that now, as well as Amoruso, includes chief financial officer Robert Ross, who joined in December from Ideeli but had a 13-year stint at Urban Outfitters Inc., and senior vice president, creative, Lina Kutsovskaya, who previously was at Sephora and also joined the company in December.
“I realized that there are only a handful of brands — maybe two [handfuls] — that are actually transforming the retail space, and this is one of them,” Waterson told WWD on Friday, her first day at Nasty Gal, which is headquartered in a 50,000-square-foot space in downtown Los Angeles.
For her, the fact that the company began from a pure vision (Amoruso started selling product out of her apartment on an eBay store in 2006) is the reason why it’s been able to become a young brand with “incredible margins that created a new kind of space altogether.” Waterson attributes this to strong product, community engagement and a large fan base — that all started online.
Together, Amoruso and Waterson plan to open the first brick-and-mortar Nasty Gal store in L.A. by year’s end. They are shopping for retail space in the area right now.
“One of the benefits of being online first and now going into retail is that we aren’t burdened with the legacy systems that big retailers have. They [other retailers] are not going to know what hit them,” Amoruso confidently said of Nasty Gal’s evolution from brand to retailer.
Because she built Nasty Gal as a technology company first, and one with an active community online, she sees the stores as an opportunity to be a “next-generation retail experience.”
While several other pure-play e-tailers have ventured into wholesaling — like Bonobos and Warby Parker — Amoruso said this is not in the plan. “It’s not ‘hell no,’ but it’s not ‘yes,’” she said, adding that it’s something that could be explored in 2015.
Nasty Gal has plenty on its plate before the opening of the brick-and-mortar store. In April, the company will launch swim — its fourth in-house-designed category. Nastygal.com already carries swimwear from outside vendors, but this will be the first time the design team will create swimsuits under the Nasty Gal label. Own-label footwear was introduced in August and Nasty Gal brand denim and apparel in 2012. For 2013, in-house product comprised 30 percent of overall sales.
The brand has started “tinkering” with lingerie, and will spend more time on developing that category this year, according to Amoruso. She’s also just brought on a home buyer in preparation for the debut of lifestyle products on the site. “What does the Nasty Gal lifestyle look like in her house?” Amoruso asked.
When asked if she would consider licenses for categories like cosmetics and fragrance, she said: “Licensing can be tricky, but under Sheree’s guidance I’m open to it. But I would tread lightly.”
A Nastygal.com.au site for the brand’s Australian customers will also launch in April.
Amoruso maintained that the company isn’t seeking further investments. Nasty Gal has raised $49 million in funding to date from Series A and Series B rounds that took place in March and August 2012 from Index Ventures.
“They [investors] want you most when you have the least time for them, and that’s always a fun game to play. We’re not exploring anything right now,” she said.
Amoruso added that, while there are no imminent plans for an initial public offering, the team is always evaluating the business. “We’ve got a long road of growth ahead of us. I am up for whatever happens, but there’s nothing specifically in the works,” she said.