As we all have heard, Forever21 has filed for bankruptcy and, as it might be a shock to some consumers, it has been a long time coming. Months prior to Forever21’s announcement, many rumors were circling around the company excluding any details or future plans for the business. But, Forever21 took charge and clarified the state of the business and what steps they will have to take to get back on the ground running.
So, what exactly happened leading to the company’s overloading debt? Well, Forever21 has prided itself for years on the “get the look for less”, the fast fashion industry, with quick retail transformations that follow trends continuously. Forever21’s success reached its peak in the early 2000’s with designer brand look-a-likes for minimum prices, but the company was going at a spend too fast for them to handle while amidst the growth of technology. Forever21 expanded stores across 47 countries, taking over out-of-business properties and opening massive, multiple level stores all around the country. With Forever21’s goal to not only target middle aged consumers, but the family as a whole, it forced the chains to grow bigger and bigger. The company continued to add loads of merchandise and avoided the anticipation of competitors, like ASOS and Fashion Nova, that took some consumers away.
While the rapid expansion of Forever21 stores was occurring, consumers were starting to question the ethics and sustainability behind the company as well as the treatment of their workers. Ms. Liebmann, chief executive of WSL Strategic Retail says,” Forever21 placed their bets… that fast fashion was going to continue the same way it had for the last decade…”. Now, consumers are beginning to drop the fast fashion garments and shop with brands that market sustainability and longevity.
With the efficiency of online shopping and the concerns of fast fashion, Forever21 stores were losing business. When reporters asked Ms. Chang, Forever21’s executive vice president, whether filing for bankruptcy was a product of the decline in consumption of fast fashion or the extension of e-commerce, she proclaimed that both factors influenced the company.
Forever21 publicly stated that they will continue operating their website and hundreds of stores in the U.S. But, they do plan to close 350 stores, with half of the closures being in the United States and the rest throughout Asia, Europe, and Canada. Ms. Chang claims “it was an important and necessary step to secure the future of our company… to reorganize our business and reposition Forever21.”
So do not fret, you can still shop for your basic tee or find all the current trends at Forever21.com or at a few locations around you, just maybe don’t forget to google if the store still exists first!