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Bankruptcy May Be Your Option

E-commerce business seeks business reorganization

Changing technologies have impacted how many companies are built and marketed. Many businesses in Oklahoma and across the country, for example, rely on social media for marketing and the expansion of their customer base. While this can be wildly effective, one company built through social media has recently announced its intention to go through business reorganization. Because of the rapid growth of the company, Nasty Gal, many people were surprised by the announcement that the company filed for bankruptcy protection.

The company was founded in 2006 by a millennial whose community college dropout story inspired many. Nasty Gal is a retailer that sells items from its own collection as well as those designed by others. The business began when the creator began selling items on eBay and expanded her reach through social media.

Reports indicate the rapid growth of the company. Forbes estimated that the company generated over $300 million in revenue in 2015 while other sources estimated that the company experienced a five-year growth rate of 92.4 even though the median rate is only 15.3. However, a company can grow quickly without making money. Additionally, reports indicate that Nasty Gal is involved in several lawsuits, many with designers claiming copyright infringement. As part of the reorganization, the creator of the company and a major investor will step down from their leadership positions.

Unfortunately, running a business is complex. As this announcement of a business reorganization plan indicates, even companies that experience a large amount of sales can struggle financially. Businesses in Oklahoma have the same option to help ensure the success of their company. Fortunately, a reorganization plan often allows the company to continuing operating normally.

Source: The New York Times, "Nasty Gal's Path to Bankruptcy", Valeriya Safronova, Nov. 11, 2016

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