Forever 21, which the New York Times describes as having "helped popularize fast fashion in the United States with its bustling stores and $5 tops," confirmed over the weekend that it is filing for bankruptcy, stopping operations in 40 countries, and closing 350 stores overall, 178 of them in the US.
The Times writes that the move reflects the "eroding power of shopping malls and the shifting tastes of young consumers … The bankruptcy is a blow to a company that prided itself on embodying the American dream, as well as a reminder of how quickly the retail landscape is transforming. Forever 21 experienced big success in the early 2000s with its troves of merchandise that imitated of-the-moment designer styles at rock-bottom prices. It joined Zara and H&M in making fast, disposable fashion widely available to American shoppers, especially young women, who were exposed to new wares seemingly every time they entered a store. But the company expanded too aggressively just as technology was beginning to upend its business."
And, the story says, the closings "puts a spotlight on the widening chasm between America’s lower-quality malls, which are losing customers and anchor tenants, and its top shopping centers, which continue to draw foot traffic."
The Times writes that the move reflects the "eroding power of shopping malls and the shifting tastes of young consumers … The bankruptcy is a blow to a company that prided itself on embodying the American dream, as well as a reminder of how quickly the retail landscape is transforming. Forever 21 experienced big success in the early 2000s with its troves of merchandise that imitated of-the-moment designer styles at rock-bottom prices. It joined Zara and H&M in making fast, disposable fashion widely available to American shoppers, especially young women, who were exposed to new wares seemingly every time they entered a store. But the company expanded too aggressively just as technology was beginning to upend its business."
And, the story says, the closings "puts a spotlight on the widening chasm between America’s lower-quality malls, which are losing customers and anchor tenants, and its top shopping centers, which continue to draw foot traffic."
- KC's View:
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One of those malls happens to be near me, in Stamford, Connecticut. I've talked about the Stamford Town Center here from time to time, using words like "mausoleum" and "depressing." It has gotten worse, with the announced closures of stores like Chico's, Pottery Barn and Williams Sonoma … and I suspect that there will be more as a new mall opens a few miles away in Norwalk. If the enormous Forever 21 there closes, it will leave an enormous empty space in the mall going into the holiday shopping season that will just add to the image of an outdated, virtually obsolete shell of a shopping experience. (When the kids were young, it was enormously difficult to get a parking space there in December. Not so much in recent years.)
Every once in a while there are rumors about the Stamford Town Center, that its future will be as a campus for the University of Connecticut, or as senior citizen housing. Wouldn't surprise me. Not at all.
I have a daughter who no doubt is part of the problem. She prefers to do almost all of her clothes shopping online, uses subscription services StitchFix and Trunk Club on a regular basis, and sees no advantage in actually going to almost any store.
The one exception in her mind, as it happens, is the food store - she likes shopping for fresh foods at the actual store. (Not CPG products.) There's a lesson in that, because I do not think she is an outlier on this. I think she reflects an entire generation.
To be clear, much of the pain at Forever 21 is self-inflicted … they expanded way too fast, and seem not to have integrated omnichannel trends into their business model to the degree they should've. These are mistakes one cannot make if one wants to have any chance of surviving.
