It is all over the news. Forever is 21 filing for bankruptcy and closing an estimate of 300 of its stores globally. And this is not an isolated case. Other clothing firms or retailers as Fashion to Figure, Payless, Gymboree, Diesel, and at least 66 more stores according to CBINSIGHTS have gone through the same or are about to. So what is going on?
ANALYZING THE FOREVER21 BANKRUPTCY
Lisa Chang, VP of Forever 21 says this was a very important step to take, to reorganize the company and reposition the company again in the market.
According to Coresight Research so far from 2018 to October 2019 about 5.589 retailers have shut down. And the estimate is 12.000 of retailers will shut down before 2019 ends.
Many economists and fashion experts have a very different vision of the situation. They think this was the smoothest and cheapest way to solve a problem caused by the fast fashion ultra-fast cycle that not only consumers but also retailers just couldn’t cope with. The easiest way out was the very feared and dirty B-word: bankruptcy.
Mind you, bankruptcy in the case of Forever 21 is not meaning closing down totally. It means downsizing importantly.
Buy and hurry!
A store manager from Forever 21 told to CNN they receive new merchandise from other retailers and malls at least once a week. “We always have the newest styles”. Yet the word quality is not on any sentence of this conversation. It is all about the very dangerous equation: New product+ Hurry up to buy it= Let´s repeat this again soon.
The traditional retailers claim the problem comes with the fashion cycles being shorter and faster. The obsession of being the first, having likes the most, being the most popular on Instagram, all of this is part of this very twisted process that at the end, has big consequences. Not only for the retailers’ owners but also for their direct and indirect employees within their whole supply chain. And let´s say it, also for the environment.
Forever 21 expanded like crazy and may be opened too many stores in areas that were not profitable enough to keep their stores open. In any case, there is a shift in the market. New young customers don’t want the same things as before. Retailers are failing to adapt to the requests of their new customers.
This problem is far from being over. The number of stores and retailers shutting down is getting bigger and there are no signs of this ending anytime soon.
The other face of this industry is the sustainable fashion movement, an expanding trend that is growing and slowly getting stronger. In the region a very clear example of it is Goshopia. They are doing a fantastic job. The ethical and sustainable fashion is the future when it comes to fashion and nothing seems to be changing that any time soon.
Retailers were struggling tremendously by the end of 2018. And 2019 appears to be a tragedy waiting to happen since nothing has changed for good in the dynamics of fashion.
Fashion is calling us, in a very uncommon way, to slow down. To think if we have been doing things right and be more educated as consumers. We buy with the guts, rarely considering our real needs. Seldon analyzing what is best, looking for price instead of quality. This indeed is a good time to re-think and re-evaluate.
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