Nasty Gal wants to conquer fashionFebruary 26, 2013: 8:27 AM ET
The startup's take on casual style may not be for everyone, but Nasty Gal's phenomenal growth rate is raising eyebrows.
FORTUNE -- If the name Nasty Gal rubs you the wrong way, odds are Sophia Amoruso's clothes also won't appeal either. "'Have you ever considered changing the name Nasty Gal?' is probably the dumbest question I've ever heard," says Amoruso.
The four-and-a-half year old Los Angeles-based online clothes retailer caters to twenty-something women with a mix of carefully curated pieces from outside designers and more recently, original in-house designs. The look is edgy. Its everyday wear wouldn't seem out-of-place on the beaches of Santa Monica or the streets of SoHo in New York. The firm's name was inspired by funk singer Betty Davis' album of the same name. "The patron saint of badass women comprises our vision of femininity -- complete with lamé platform thigh-high boots," reads the startup's online manifesto.
Since its founding, Nasty Gal has taken off and become a notable new name in the $1 trillion e-commerce market. Last year, sales grew nearly four-fold to $100 million, and even though the company has raised almost $50 million from the early-stage venture capital group Index Ventures, Nasty Gal has been profitable from the outset, all without the daily deals or deep discounts that have fueled the growth of other so-called e-tailers. Nasty Gal has a huge following on Facebook (FB), Instagram, and Twitter. In Facebook comments, hundreds of customers chatter about whether to pick up a silver holographic high-top sneaker or a contemporary take on the classic motorcycle jacket. Pieces often start at $30 and go from there.
"We believe subscriptions in a box, celebrity endorsements, and daily deals just aren't long-standing businesses," explains Danny Rimer, an Index Ventures partner, who predicts fashion ventures like Amoruso's will come to represent one-third of all e-commerce revenues in the next few years. What about Amazon (AMZN) or eBay (EBAY), juggernauts that have proven they can change tack to grow their businesses? "Nasty Gal has a truly differentiated product, a cult-like following, and exists purely online. Those aren't things you can just manufacture."
It hasn't been easy getting there for the company's 28-year-old founder and CEO. Amoruso's rags-to-riches story is already semi-legend. Before Nasty Gal, Amoruso was a community college drop-out who had roughed a total of 10 retail jobs, from a stint at Borders to peddling luxury shoes in San Francisco. "The women who'd come in were just pretty awful," recalls Amoruso. "Selling $500 shoes when you make $12 an hour is just an awkward economic juxtaposition." When she was 22, she began selling vintage clothes on eBay, snapping them up on the cheap from the site and reselling them to others at prices up to five times as much. She started Nastygal.com in 2008.
In the four-and-a-half years since, Nasty Gal has become a real business, staffed by nearly 300 employees. Not surprisingly, Amoruso has a reputation as tenacious and direct. She met ShoeDazzle COO Deborah Benton on LinkedIn and, now, Benton is Nasty Gal's president. The company launched a biannual print magazine last fall, featuring photos by famed fashion photographer Terry Richardson. A piece from last fall's in-house collection, the $128 black Network Dress, became a best seller and sold 600 units.
About one-third of Nasty Gal's revenues now come from Canada, the U.K., and Australia, where Amoruso's distinct brand has also found an eager audience. "She knows how women want to consume fashion whether it's content or commerce," says Benton. "She knows how fluent women are with mobile devices and shopping online, and she truly understands social media." Amoruso also remains extremely frugal. After a recent marketing panel hosted by Hollywood powerhouse the Creative Artists Agency, she appeared less concerned about the audience and more worried about whether she'd gotten her parking validated.
What's next? "The universe," deadpans Amoruso. She's not kidding. When she's not renovating her home or hanging out with her boyfriend and poodle, Donna Summer, Amoruso dreams up ways to open up the brand even further. "How to party with them on our website, 24 hours a day is the idea I'd like to make a reality," she confesses.