Forever 21’s downfall should be studied. Sure, the mall isn’t dead yet, but it’s limping heavily. This fall isn’t just a business blip, but an actual signal flare. How has this teen fashion empire ended on such a low? And more than that, will its legacy matter years from now? Every mall brand left must study this case to avoid such disaster. Since something like this happened to Forever 21, it could happen to anyone! Right? Let’s explore the reasons why Forever 21’s fall from grace is of interest to all other mall brands around.
1. Burning Too Bright
Some experts argue Forever 21 expanded too fast. They opened stores worldwide at an overwhelming speed. And too many stores meant havoc in their inventory. So they couldn’t keep up with e-commerce, or with the shifting trends present in our fast-paced world today. Instead of being “forever”, they fizzled out fast.
2. Quantity Over Strategy
At the very peak of their glory, Forever 21 owned over 800 stores spread throughout 57 countries. But looking deeper into this, we discover that many of these stores were performing poorly due to how massive they were. High rent and an oversized footprint meant they were hemorrhaging money fast, as they weren’t able to rake in enough profit. They overestimated their success overseas, and let this be a lesson. Bigger isn’t always better.
3. Ignored The Online Shift
While many stores understood how crucial investing digitally was, Forever 21 believed itself too good to cave in. Their website was laggy, with such a poor app that people uninstalled it from their phones the very next day. They surely didn’t expect so many customers to shift to online buying so fast. And in retail, delay means death.
4. Forever Left Behind
While Forever 21 might be ingrained in Millennials’ minds forever, Gen Z barely acknowledges its existence. Due to recent world events and the difference in generations, Gen Z is more interested in thrifting, online microtrends and shopping for sustainability. Forever 21 failed to realize that cheap and quickly disposable crop tops don’t make the cut anymore.
5. The Rise Of TikTok
TikTok revolutionized the fashion world. Users are exposed to influencer brands and viral startups on the daily, which easily steal the spotlight. Forever 21 always struggled to make their branding appear personal, something this niche collective on TikTok succeeds in.
6. Sustainability Is On The Rise
News about pollution and the effects of fast fashion affected the masses. The new generation is more interested in climate change and to help the world rather than fall into the consumerism trap, which is something that Forever 21 relied on. They’re remembered as the poster child for “throwaway” clothes, which doesn’t look good nowadays.
7. Mall Traffic Is Failing
The fantasy of a “shopping spree” is losing fans. Malls are now ghost towns rather than the center of teens’ social life. One might argue the pandemic accelerated this, but truthfully, we began drifting away from strolling around malls years before. So with fewer people wandering around, there are fewer impulse buys.
8. Department Stores Are Collapsing
Even Macy’s is struggling! Overall, with stores like Sears or JCPenney close to vanishing, people are even less interested in visiting malls. Brands like Forever 21 lost this ecosystem, the one which made sure to feed them. Unfortunately, they couldn’t have prevented this.
9. COVID-19 Contributed
The pandemic hit everyone hard, but it was disastrous for fast fashion. No more dressing rooms, the supplies would get delayed for weeks at a time and the landlords would declare bankruptcy. Brands that lacked the online market fell apart. And Forever 21? It was the first one to suffer.
10. Who Are You?
Millennials outgrew Forever 21, and it failed to be a part of Gen Z’s lives. Forever 21 has been missing a clear demographic for a while now, which means it lost its message. But then again, has it ever really had one? This brand, some might say, lacked an identity from the start.
11. Too Much Inventory Killed Profit
Overproducing and underselling: The most straightforward recipe for disaster. Relying heavily on clearance racks while profit depends on 70% off sales means you’ll be financially ruined soon. Malls being filled with the same style in every store surely didn’t help either.
12. Global Expansion Proved To Be A Global Mistake
The U.S. loved Forever 21. It was a cultural phenomenon, but it never really earned global recognition before expanding overseas. Countries cared about yet another fast fashion store as much as the next one, and the overly Americanized style just failed to sell. Some stores were open for less than a year!
13. Bankruptcy Was Only The Beginning
Forever 21 filed for Chapter 11 in 2019. Hundreds of stores were closed then. But has this move worked in their favor? Not at all, even with “ditching the unnecessary” and the so-called money sinkholes, Forever 21 failed to recover what was lost. Poor technology, weak branding, and lost relevance are all present to this day.
14. Competitors Got Smarter
Brands like Zara and Shein outgrew Forever 21 simply by appealing to the masses. What they did, to put it plainly, was to invest in customer data and fast response supply chains to create a better online experience. And shoppers immediately flocked to what actually helped them get their desired products fast.
15. This New Generation Wants A Connection
As mentioned previously, Gen Z loves connection. Personalization, transparency, and most of all: a story. When talking about brands people invoke emotion, and there is sadly none when discussing Forever 21. It’s memorable due to Millenials’ early fashion sense, yet as a brand, there is nothing attached.
16. The Rise Of Secondhand
Depop, Poshmark, Vinted. All these apps have one thing in common. They sell affordable, quality clothing that’s been destigmatized from being secondhand. Now people view secondhand items not as deficient or embarrassing, but a smart financial choice. Compare it to clothing that falls apart after a few wears, and you know who the winner is.
17. Physical Retail Must Evolve
90% of shoppers still enjoy a walk to the local mall. Physical retail isn’t dead, but it cannot stagnate like this much longer. Brands must prove to be innovative enough to get people out of their homes for these products.
18. Mall Brands Should Take Notes
Things like a beautiful, Instagram-worthy space, or a community event scheduled every month would push customers into assuming loyalty for a certain brand. It is what works nowadays, fitting with people’s expectations and requirements. If the store has been looking the same since 2010, then that is a major failure.
19. Adapt Or Be Forgotten
May Forever 21 be a warning to all mall brands. Unfortunately, salvation was lost on this retail chain. Other mall brands must regroup and assure customers of value and ethics. This is a transformation, the old being left in the past. So, those who are bold enough to try changing have a fighting chance.
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