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Fashion Retailer Forever 21 Fails to Keep Up and Faces Mass Store Closure
Rebecca Appleton • 1 October 2019
The American youth fashion brand Forever 21 has announced that it is set to close around 350 of its 800 worldwide stores by the end of the year. Founded in 1984, the retailer will be removing stores primarily from Europe and Asia to focus only on the US, Mexico and Latin America as part of a restructure and bankruptcy protection move.
You may wonder why this is relevant to you after taking up an Eazi-Apps award-winning Business-In-A-Box solution to launch your mobile app agency. The reason is simple. This piece of news, albeit one of a slew of stories about struggling retailers of late, should resonate with you as an entrepreneur. In fact, the brand’s struggles contain a very clear lesson for all business leaders which highlights the importance of being open to change, clear in your strategy and able to adopt a digital first mindset.
At its height, Forever 21 pulled in a reported $4.4billion per year. It has significantly fallen from grace with heavy criticism surrounding its seeming inability to adapt to the modern digital retail era. The brand is known for occupying prime real estate combining location and style. It favours polished and renovated cathedral like venues which don’t come cheap. This is so much part of the brand’s make up that it occupies the seventh most expensive retail store in New York City as well as prime placements in luxury department stores across the US.
This strategy is heavily reliant on bricks and mortar and is widely considered to be one of the brand’s major downfalls. As other brands have kept pace with changing consumer habits and shifted to heavy investment in online retail and digital marketing, Forever 21 has struggled to keep up.
Despite this seeming like a very obvious sticking point, many observers have said that all in all, the retailer has simply failed to move with the times. The collapse of this high street behemoth really highlights that however large or small your business may be, it’s vital to keep close taps on your customers’ changing habits.
Competitor brands such as H&M and Zara have shown significant revenue growth in the past few years despite having a very similar overall offering to Forever 21 in the sense that they sell affordable fashion with a premium feel. The difference with these brands is that they have kept in line with the needs of their audience, providing affordable fashion that fits and meets a common need. Clothing for a night out at the weekend, a new job wardrobe and going on dates. Focusing on providing up-to-date in store and online experiences has enabled them to stay relevant and in tune with their audience. This is something Forever 21 hasn’t managed to do.
While millennial and generation Z both put a lot of store in the importance of sustainability and moral values in fashion, Forever 21 again missed the boat.
While the brand is not down and out just yet, it’s clear that ignoring the changing times and failing to adapt to consumer retail habits has cost them dearly and they have to make some significant shifts in how they brand themselves and do business in order to survive.
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