It feels like every month – sometimes every week – we see yet another news story about the financial implosion of the retail giants of yesteryear:
Nearly a decade ago, before Instagram influencers existed, Forever 21 helped teen girls dress like their favorite celebrities, for cheap.
It wasn’t a novel idea — teenage girls have always wanted to dress like their idols. The dizzying speed at which Forever 21 could make those trends available and affordable, however, was.
Forever 21 reportedly is now in financial trouble and developing restructuring plans in hopes of avoiding a possible sale or bankruptcy. With about 800 stores worldwide and more than $3 billion in estimated annual sales, Forever 21 — a privately held family business that started with a single store in Los Angeles’ Highland Park neighborhood in 1984 — is being squeezed on multiple fronts.
The chain reportedly needs to shore up its finances just as its coolness factor is indeed ebbing and young consumers keep migrating to other retailers, especially online sellers. Forever 21’s own missteps haven’t helped, including its move to sell clothes and other merchandise for a wide variety of shoppers — a broadening of focus that diminished its reputation with young buyers, analysts said.
“They’ve lost sight of what brought them there,” said Roger Beahm, executive director of the Center for Retail Innovation at Wake Forest University. “They’ve tried to make up for it by expanding the appeal, and I think you end up diluting what you stand for.”
The resulting irony is that Forever 21, which once benefited from dying traditional retailers such as Mervyn’s and Gottschalks by taking over their shuttered stores, is now threatening to become the next major trouble spot for already ailing mall operators.