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Retail OPINION

How Forever 21 continues to maintain a retail presence

By Sara Ehlers

Jul 20, 2016

Los Angeles - Fast-fashion company Forever 21 is one of the most known names in retail. Due to their affordable, chic clothing, the Los Angeles-based retailer has become a staple for shopping malls and local plazas everywhere. Part of this has to do with the trendy retailer’s strategy plan over the years. Through constantly making necessary adjustments, it seems that Forever 21 has managed to stay afloat in the fashion industry.

Through various in-house brands, expansions, down-sizing, and business changes; the Los Angeles-based retailer has continued to keep its business running over the years. Unlike other companies (such as American Apparel, Wet Seal, etc.) that have faced bankruptcy and debt issues, Forever 21 has been able to avoid those problems. One of the ways that the retailer has done this is by deciding to downsize its international stores. Where some stores have failed through expanding in retail flagships too much and too soon, Forever 21 made the decision earlier this year to close its under-performing stores. In June, the company announced that it would shut down some of its U.K. locations including its stores in Manchester, London, and Glasgow.

Forever 21 downsizes stores internationally

The company was undergoing assessment of its U.K. stores, as previously reported by FashionUnited, which led to realizing how the company could improve. These stores were reported to have lost millions of dollars which caused a huge loss for the company. In British documents, the company lost approximately 98 million dollars in pretax loss in 2013, according to Apparel News. This caused Forever 21 to reevaluate and move forward by shuttering the locations that aren’t making a profit.

In addition to downsizing internationally, the fashion retailer also has undergone various business deals. Aditya Birla Fashion (ABRF), India-based apparel giant, acquired Forever 21’s business in India earlier this month. The 26 million dollar deal was sealed earlier in the month, giving the acquiring company offline and online rights for the Indian market. The deal acts as a bonding partnership for ABFR and Forever 21 that will help build the womenswear brand more in India. Partnering with big apparel giants is also one of the ways that Forever 21 has managed to continue making steps in the right direction.

Also, in making more changes, Forever 21 separated from its two-year long partnership with its shipping firm. The company officially separated from EZ Worldwide Express due to the shipping firm’s difficult financial conditions. Because of this, EZ Worldwide Express felt that it could no longer provide the same delivery services with their financial struggles. As the partnership no longer served Forever 21 for what the retailer needs, the Los Angeles-based company decided to separate.

Separately, these moves may not seem interconnected, but overall they have allowed Forever 21 to maintain its business and stay relevant in fashion and retail. As shopping malls have declined, the retailer has managed to keep sales and invent new ways to implement smart, strategic business decisions for its future. Most of these changes have all come about recently in the past year as well. How the company fares in future years remains to be seen, but for now the company’s been able to hold its own against the retail’s daunting decline.

Photo: Forever 21