No tears for Boohoo as it nears $20m acquisition of US firm Nasty Gal’s assets
Boohoo's share price rose this morning after the online fashion retailer announced it has initially agreed to snap up several assets from US group Nasty Gal for a cool $20m (£16.2m).
Joint chief executives Mahmud Kamani and Carol Kane said the purchase agreement, which is Boohoo's second acquisition announced this month, is an "ideal next step" for the firm.
Two weeks ago, Boohoo snapped up a majority stake in fellow online retailer PrettyLittleThing for £3.3m.
In the same announcement, Boohoo upped its forecasts for the third time this year – it now expects to deliver revenue growth of 38 to 42 per cent for the full year, up from previous guidance of 30 to 35 per cent.
Read more: Here's why Boohoo's share price has hit an all-time high
Nasty Gal filed for Chapter 11 bankruptcy on 9 November, and in early January Boohoo will be appointed the "stalking horse" (i.e. primary) bidder for Nasty Gal's brand and customer databases.
Nasty Gal's net revenue for the year ended 1 February came in at more than $77m, though it made a net loss after tax of $21m, dragged down by operating costs.
Snapping up Nasty Gal's intellectual property assets will help "to accelerate [Boohoo's] international growth, particularly in the US", the group said in a statement.
Read more: Boohoo's share price climbs as it ups guidance after sales soar
Kamani and Kane said:
Should we be successful in acquiring Nasty Gal it would represent a fantastic opportunity to add such a well-established, global brand to the Boohoo family. Following our recent acquisition of PrettyLittleThing.com we believe this would represent an ideal next step in inspiring an ever-growing range of young customers internationally.
Boohoo's share price was up 1.8 per cent this morning to 134.59p.
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