The rage of 5 dollar tee shirts and three-story buildings full of cheap fashion has finally hit its downfall as the well-known company, Forever 21, has filed for bankruptcy.
Forever 21 was founded in 1984 but did not hit its stride until the beginning of the 21st century when the era of “fast fashion” was born.
During the companies’ booming years, they rapidly expanded their stores and became a staple in American malls. As years went by, the company continued to expand despite the slow down of sales in their retail storefronts. Because of the rapid developments, the company has found itself in over 500 million in debt, according to market research firm Mintel.
The stores’ seemingly sudden decline stems from the numerous competing brands targeted at the same young consumers such as Zara, H&M, and Fashion Nova. Used clothing companies such as Thred Up and Tradesy also pose a serious threat to Forever 21 because sustainability has become more important than disposable fashion.
In today’s world of technology, online shopping has demolished shopping malls and its appeal. It is no longer a popular activity to roam around the mall and spend money. The online market offers the luxury of convenience and the ability to compare prices in order to score the best deal. Forever 21 currently lacks the strong online presence it needs to survive in today’s world. The well-known company often receives critiques from female consumers that the products are meant for only a sliver of the population: women in their twenties. It is obvious given the name that the targeted crowd is women who are 21 and want to look it, and women who wish they were again.
Although Forever 21 shows signs of struggle, they are determined to keep the business alive by revamping its entire model. The company has requested to close 178 stores across the country in order to focus on restructuring the business.
“Restructuring will focus on maximizing the value of our U.S. footprint and shuttering certain international locations,” the company said in a separate statement to the media.
The companies statement explains that through the revamping of the store, they will return to the basic fashion pieces that skyrocketed their success in the early years of the century. “This was an important and necessary step to secure the future of our company, which will enable us to reorganize our business and reposition Forever 21,” Executive Vice President Linda Chang said in a statement.
Despite the economic downfall of the well-known company, employees are still expected to receive benefits and competitive pay. The company is expected to hire more than 4,000 employees for the upcoming holiday season alone and 700 temporary staff.
It is going to take a lot of hard work from the company to get back on its feet and compete both online and in storefronts. Going back to the basics could potentially help business, but with so much competition they are going to need an element that will aid in standing out from competing companies.
Although the spotlight is on Forever 21, there are many large retail stores in the same position. Retailers such as Barney’s and Diesel USA are seeking Bankruptcy protection, others such as Payless Shoe Source and Charlotte Russe have shut down altogether.
The question is, will Forever 21 rise to the top as it did before, or will it sink to the bottom? Whether or not the company uses the correct strategies in its reconstruction will determine its success in the fashion industry of today. Forever 21 has a lot of work to be done in the coming years as they attempt to rebrand.