UK online fashion retailer Boohoo has entered into an asset purchase deal worth US$20m to acquire certain intellectual property assets from Nasty Gal following the US womenswear retailer's bankruptcy last year.

Nasty Gal filed for Chapter 11 Bankruptcy protection on 9 November 2016. Subject to US court approval, which will be sought on Thursday (5 January), Boohoo's subsidiary, Boohoo F I Limited, will be appointed as the "stalking horse" bidder for the brand and customer databases. More details on the deal are expected to be provided after this date.

Boohoo says Nasty Gal would complement its own "inclusive and inspirational" brand and, by leveraging the group's existing product development, supply and distribution expertise, has the potential to accelerate its international growth, particularly in the US. 
 
"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," says joint CEOs Mahmud Kamani and Carol Kane. "Following our recent acquisition of PrettyLittleThing.com (PLT) we believe this would represent an ideal next step in inspiring an ever-growing range of young customers internationally."

Boohoo acquired a majority stake in the fast fashion brand PrettyLittleThing in December in a deal worth GBP3.3m (US$4.1m) as part of plans to accelerate its global growth. It acquired 66% of the issued share capital of PLT, with the option to acquire the remaining 34% at market value as at 28 February 2022.

Boohoo buys stake in rival PrettyLittleThing

In its latest deal, the sale of the Nasty Gal assets will be governed by a court approved bidding process lasting at least 30 days. The group's bid may not result in a transaction if "higher or more favourable" offers are obtained by Nasty Gal during the auction process.
 
Founded in 2006, Nasty Gal delivered net revenues of $77.1m in the year ended 1 February 2016. This included revenue from vintage clothing and third party brands, which are excluded from the proposed transaction. 

Reports suggest that other potential interested parties could include UK-based Asos, or licensing companies such as Authentic Brands or Sequential Brands.

Boohoo appears to be in a strong position to acquire Nasty Gal, however, as it looks to expand outside of Europe. In its first-half, the company posted a jump in sales of 40% to GBP127.3m (US$160.6m), while pre-tax profit jumped 129% to GBP14.4m.