Forever Failing – The Fall of Forever 21

I still have the scar. Just on top of my left foot from that time a men’s fragrance bottle fell and bounced off of the table I was merchandising, leaving an open wound, infected by the strong musky scent of cheap cologne. What did I get myself into? Honestly, what was I thinking? Every fashion merchandising graduate’s dream job was either in buying or visual merchandising and there I was, visual merchandiser at Forever 21, lead of Children’s, Men’s, Plus, and Contemporary departments. The honeymoon phase quickly wore off after the first day. I had sold my soul to a company that exploited millions of lives though proudly representing Christian values with the verse John 3:16 written on the bottom of their bright yellow plastic bags. Why was this my favorite store in high school?

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We would arrive at 6 am every Monday through Friday and would leave around 2 pm unless it was floor set week. Then, we would work from 10 pm and leave around 8 or 9 am the next day. Every visual would smoke during our 10 minute break. Apparently, it was the only thing that kept the sanity. Why was this job so stressful? But the more questions I asked, the more aware I was of just how meaningless my life had become. I no longer had a purpose. I no longer had a passion. I would leave at 2 pm, feeling unaccomplished because I didn’t get through merchandising my entire section only to come back the next day to find that my beautiful displays were destroyed. Destroyed by the consumers. Consumers trying to find the best deal because $5 for a t-shirt wasn’t enough of a deal already. Did these consumers not think about the time and effort it took someone to arrange the display, literally getting so deep into it that the merchandise left a permanent scar on their foot. Did they not think about the people behind the scenes? Did they not think about me?

Then it hit me. A reminder from the documentary we watched in my Fashion Econ class. No one cared about the people behind the $5 shirt. The visuals, the cashiers, the associates, the actual makers of the shirt. No one. They only cared about the deal. They’ll wear the item a few times then it will develop rips and tears and they’ll throw it out. Or donate it to Goodwill only to be rejected by Goodwill and shipped on the nearest cargo ship to Africa or India. Only to be rejected by the locals and thrown away going wherever things go after that point (back to the U.S. if it ended up in Malaysia). All the effort taken into making and merchandising that one shirt just to be thrown away within a week of purchase. My job sucked and I wanted out. I got out 3 months later and began my journey working in ethical fashion. Fast forward 5 years later and now the place that forced me to think about clothes beyond simply wearing them, has filed for bankruptcy! The fast fashion enablers have filed for the removal of their people exploiting and planet killing platform, or, so we hope.

The Debtor in Possession

Forever 21 filed for Chapter 11 bankruptcy protection which is the option for reorganization. “This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21,” Linda Chang, the company’s executive vice president said in the statement.

They are continuing to operate business as usual, even securing approval for employee benefits and reimbursements and hiring staff for the upcoming holiday season. Although, many employees will lose their jobs worldwide due to the closing of most international stores. This is an unfortunate consequence of the various mistakes made by large corporations. The ones that endure the consequences are not the ones that make the mistakes.

Learning from their Mistakes

Mistake #1: Failure to Evolve their E-Commerce Presence

Forever 21’s biggest revenue increase was reported in the 2000’s when malls and bargain shopping were more in fashion. They spent marketing dollars and inventory savings on this mall-based business model fad, allocating millions for opening and stocking stores worldwide. What they, and other retailers such as Charlotte Russe and American Apparel, failed to realize is that the digital economy was fast approaching. As the internet continued to develop, so did knowledge, access, and unfortunately, convenience. Brands were too busy focusing on the dollar signs of current trends rather than investing in future ones.

Currently, their online store represents 16% of their overall sales in an economy with 79% of people shopping online.

Mistake #2: Failure to Adopt Sustainable Practices

Image courtesy of Greenblut

The growth in internet brought forth a growth in knowledge. We are in an age where all we have to do is ask Google or Siri a question and we receive a wealth of information on the subject. This easy way to access information has sparked more questions among millennial users. They are now starting to care more about their environment and the people in it than ever before. Sustainability is trending and hopefully it’s not just a fad. H&M recognized this shift and have tried to jump on board. Forever 21 did not. If sustainability is not a part of their new reorganization strategy, it should be or they will be filing for Chapter 7 bankruptcy in a few short years.

Mistake #3: Value Creation Plateau

During it’s heyday, Forever 21 offered cheap alternatives to runway looks. At that time, consumers craved the mainstream. They wanted to feel accepted in their clothing rather than to stand-out; sporting logo shirts and cookie-cutter designs. Now, consumers crave timeless, unique pieces. They love thrifting and purchasing secondhand clothing on apps like Poshmark and thredUp. Consumers want to express their individuality and lack of conformity, two characteristics Forever 21 was not founded on. In short, Forever 21 lacks value. They’ve filled a gap that no longer exists. If they wish to continue in existence, they must establish how they can add value in this new world that would rather see them fail.

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