Once this brand was considered the darling of millennial women… Now it’s struggling to pay rent. In their latest move, Forever 21 is asking landlords across the country to lower their rents so the company can cut costs.
The brand was once a must-stop for teen girls on their trips to the mall, but has since become an afterthought…
Could the brand be facing the end of its days?
Forever 21 Is Behind On Rent
Earlier this month, Forever 21 started asking landlords at certain locations to cut the brand’s rent by as much as 50%.
With over 380 locations across the country, the women’s fashion line has been failing to meet rent, with bills going over 70 days past due.
This new wave of rent concessions is part of Forever 21’s efforts to cut costs to save themselves from bankruptcy, yet again.
HOW DID THE SHOPPING MALL STAPLE GET INTO THIS MESS?
When the brand was growing, executives decided to expand all too quickly. Instead of pacing their expansions…
The company went all in on adding more locations without developing their supply chains…
Leading to more locations than the company could handle without the infrastructure to keep them all stocked.
In 2019, Forever 21 filed for bankruptcy protection and was bought out by Authentic Brands Group…
BUT SINCE THEN, THE BRAND HASN’T FARED MUCH BETTER.
While Forever 21 hasn’t filed for bankruptcy protection again, the company also hasn’t advisors to help solve its problems.
The brand has also been struggling immensely with connecting to its original customer base. With trend cycles moving at a break-neck speed, its been hard for the company to identify and latch onto the next big thing in style.
And in truth…
Forever 21’s competition poses a bigger threat than ever.
Forever Behind The Trends
During it’s peak, the brands with the biggest competition to Forever 21 were always the predictable H&M and Zara…
Now the company faces even bigger foes: Shein and Temu
The two chinese brands have completely remade the pace with which fashion companies cycle through new items.
Forever 21, H&M, and Zara have all been known as fast fashion…
BUT SHEIN AND TEMU ARE ULTRA-FAST FASHION WITH SHEIN ADDING UP TO 10,000 NEW STYLES TO THEIR WEBSITE EVERY DAY.
If this looks intimidating to other brands… its because it is.
Even Forever 21 knows the company cannot compete. One individual close to the matter said…
“As soon as someone goes viral in a new outfit on TikTok, Shein is immediately making it and no regular brand can keep up with that.”
So to have a fighting chance against their biggest foe yet, Forever 21 decided…
IF YOU CAN’T BEAT ‘EM, JOIN ‘EM.
In 2023, the two fashion giants entered into a partnership that included co-branding clothes and Forever 21 using their locations to host Shein pop-ups…
Since Shein operates almost exclusively online.
Forever 21 also began accepting Shein returns, which has increased foot traffic in the brand’s physical locations.
Count Your Days
But even with this lucrative partnership…
It might not be enough to save the company.
With the company finding themselves in more and more problems…
We will just have to see if Forever 21 really is forever.
Be Great,
GCTV Staff
Disclaimer: This content is intended to be used for educational and informational purposes only. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment or business decision. Investment, real estate, and business involve great risk and there is no guarantee of performance or results.We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice. We recommend seeking the advice of a financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.
