The changing retail climate has finally caught up to the popular retail store Forever 21. A combination of factors have contributed to it’s growing downfall, including more efficient brands, online shopping, and massive discount stores, which have won over some of F21’s customers by offering the same popular fashion styles at even better prices. Forever 21 has not been able to keep up and improve from the inside, which has added to its drawbacks and recent struggles. Not too mention the company recently released perhaps the ugliest shorts ever created with their fake news shorts (these shorts just may in fact be the reason for all of their newfound troubles).
The top destination for people to turn for popular but affordable clothing has officially began it’s bankruptcy proceedings. There has been issues in available cash within the company, and its plans to change the brand have not been working. As of last week reported by Forbes, the company is attempting to get more money to continue operations, as well as to restructure its debts. They have been unable to do so efficiently, and now are looking for a loan while they contemplate entering Chapter 11 bankruptcy.
Forever 21 was originally created in 1984, and it’s business is dedicated to selling cheap clothing within over 800 stores across the United States, Asia, and South America. However, the fact that Forever 21 may cease to exist from the retail world is not so surprising. Its an amazing thing that it actually did not start happening earlier considering all of the mistakes the company has been making in recent years.
The more or less empty Forever 21 stores throughout the United States prove this, as the store is consistently becoming less and less popular with shoppers. Other competitors within malls, such as Abercrombie & Fitch, were able to curb decreasing sales by investing in the quality of the clothing. Zara has also become a popular name recently due to its increased offering and the related rise in prices. However, Forever 21 remained constant with their strategy of inexpensively made goods with their correspondingly cheap prices. The lack of originality in their strategy and competition from competitors have made it difficult to keep up. One competitor in particular has made life difficult for Forever 21 and that is H&M. H&M is the new king of fast fashion and is definitely a top reason Forever 21 has lost a lot of their clientele in recent years.
Other clothing retails stores that were in financial trouble turned to shutting down stores which weren’t generating revenue, and also terminated employees. All of these options increased profits and help other retailers survive. Forever 21 has struggled to do even this. The ending results in the apparel world is that there does not seem to be a need for Forever 21 as there once was. There are plenty of other places that shoppers could go for similar, if not better, products. There are just too many other retailers with strong positions within this market. Not too mention Amazon Fashion continues to grow at a rapid pace.
It seems the company somewhere along the path lost their ability to create and sell relatable fashion. The company used to be able to copy the more expensive brands efficiently. However, this lead to legal troubles and also having too many options, and while the quality of the clothing fell, so did the stores impact in the fashion world. In addition, the company also had huge stores in terms of square footage, which in the end was highly unnecessary and drained the company’s cash.
In addition, the world is currently shifting to more of an automated, online form of shopping. More and more people are skipping a trip to the mall and instead hopping on their computers. There are too many Forever 21 stores in the country in the first place, and on top of that, the company has not been able to identify lesser performing stores and subsequently eliminate them. Forever 21’s online shopping experience hasn’t been the best either as they recently sent out diet bars with plus-size orders which caused a social media uproar. The company later apologized about sending the diet bars.
By the numbers, it is said that the amount of shopping taking place online will increase from about 15% to about 26%, with around 70,000 stores closing around the country by 2026. That means that of the approximate 1,000,000 retail stores around the country, around 7% of them will be closing soon. In terms of clothing stores, around 20,000 will be closed out of the 80,000 that are currently in operation.
The massive waves that will hit retail will almost surely continue affecting Forever 21 as it has already begun affecting other major retailers such as PacSun (PacSun filed for Chapter 11 a few years ago but managed to survive). Only time will tell what happens to retail in general, but you could make a gigantic bet that Forever 21 will not continue to be the fashion powerhouse that it once was. They only have themselves to blame.
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