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Former Apple Retail Boss Ron Johnson Leads $16 Million Investment in Nasty Gal

The investment comes as Nasty Gal plans to open its second brick-and-mortar store.

Nasty Gal
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Online retailer Nasty Gal is gearing up for its brick-and-mortar moment and has brought in former Apple retail boss Ron Johnson to help guide the way.

Johnson is leading a $16 million investment in the Los Angeles-based company and joining the women retailer’s board of directors, founder Sophia Amoruso told Re/code in a telephone interview. Johnson was the mastermind of Apple’s retail strategy and then held the CEO role at J.C. Penney in a tumultuous stint. He’s now CEO of a yet-to-launch e-commerce startup called Enjoy. Existing investor Index Ventures also invested in the Nasty Gal round alongside some others that Amoruso declined to name.

Amoruso and Johnson were introduced more than a year ago by Index’s mentor in residence James Higa, who knew Johnson from Apple where Higa was a long-time exec and Steve Jobs confidante. They began talking from time to time and when Nasty Gal opened its first brick-and-mortar store in the fall, Johnson took a day off from his new startup to fly to Los Angeles and give advice to the Nasty Gal founder, Amoruso said. With one store open and doing well and another one coming in March, the company restarted talks with potential investors that it had put on hold in the fall.

“Ron was always my first choice,” she said.

At $16 million, though, the Series C funding is considerably smaller than the $40 million Series B investment that Index led in 2012. Such a drop-off is not usually a good sign and the edgy women’s retailer is indeed coming off a difficult year that saw revenue growth slow and the company make layoffs. Still, Amoruso said the size of the deal was more about the fact that the company hasn’t yet committed to opening more than a second store and the founder wants to be smart about how much ownership she is giving up.

“We don’t have an aggressive rollout planned,” she said. “We want to get another one open, learn a lot and then hopefully destroy everyone.”

The new investment comes six weeks after Amoruso handed over the CEO role to her No. 2 exec Sheree Waterson. Amoruso is now executive chairman, leading Nasty Gal’s creative and brand marketing teams in a full-time capacity. Johnson joins Amoruso and Waterson on the company’s board of directors, along with Danny Rimer of Index Ventures.

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