Forever 21 has recently announced that it is filing for bankruptcy — but what exactly does that mean for the company and its future?
Forever 21 has been one of the most popular fast fashion brands since the early 2000s, offering trendy styles at a low price. Forever 21 became a billion dollar company and expanded its business rapidly, which has now come to back to hurt the company.
Forever 21 never predicted the rise of technology within the fashion market, or how it would effect them. While Forever 21 was expending to different locations in malls, they were not expanding their presence online. This shift in the market has made online competitions, such as Fashion Nova, more successful in their outreach to costumers.
The company’s bankruptcy opens up questions about another shift in the market pertaining to fast fashion. Younger shoppers, which are the company’s main target, are more often turning away from fast fashion because of their environmental impact. Instead, they turn towards consigned goods and companies that value sustainability.
Their approach to fast fashion and copying designers has also caused Forever 21 to be the subject of multiple copyright and trademark lawsuits over the years. The most recent complaint, made soon before the company declared bankruptcy, was made by singer Ariana Grande.
Grande claimed that the company used a look-alike model, as well as the look, audio and lyrics from her single “7 rings.” Grande soon filed a 10 million dollar lawsuit against the brand over trademark infringement.
In terms of the future of Forever 21, according to the New York Times, Forever 21 plans to cease operations in 40 countries, while also closing up to 178 stores in the US and 350 stores total.
However, just because the company is closing does not necessarily mean their presence in the fashion market will be gone. Forever 21 has said that they still plan on running their online stores and hundreds of stores worldwide that act as the companies major tenants.