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Why Forever 21 needs to go bankrupt and disappear



Forever 21 has been eaten alive by the new monsters of retail today, digital shopping and ginormous discount stores that finally offer hot fashion at always good prices.

An inability to develop internally has also inhibited Forever 21.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "One of the former go-to destinations for single-use fashion & nbsp; is preparing for a potential bankruptcy & nbsp; filing, according to a new Bloomberg report. With cash flow sinking and turning operations did not work, Forever 21 reportedly sought additional funding and debt restructuring, but these talks have stopped, per Bloomberg, and now the company may appear to be taking out a loan with the debtor and reorganizing Chapter 11. "data-reactid =" 17 "> One of the former traveling destinations for disposable fashion is preparing for a potential bankruptcy filing, according to a recent Bloomberg report. While cash flow slowed and turnaround plans did not work, Forever 21 reportedly sought additional funding and debt restructuring. But these conversations have stopped, per Bloomberg, and now the company may appear to be taking out a loan from the debtor and entering into the reorganization of Chapter 11.

In other words, here come many store closures.

Forever 21 did not return Yahoo Finance's request for comment. The company, which was founded in 1984, sells its cheap goods in more than 800 stores in the United States, Europe, Asia and Latin America.

Hearing Forever 21 knock on the death door is nothing shocking. In fact, one has to wonder what in the world took so long.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "First, Forever 21 has become more and more irrelevant in malls across the country, while mall competitors such as Abercrombie & Fitch ( ANF ) & nbsp; have invested in product quality to attract buyers Forever 21 has stayed true to the cheaply produced , cheaply priced trading roots. While Zara has put up its fashion game (and the prices), Forever 21 has not kept pace, according to experts Yahoo Finance has spoken up. "data-reactid =" 21 "> First, Forever 21 has become increasingly irrelevant in malls across the country. While rivals from malls such as Abercrombie & Fitch (ANF) have invested in product quality to attract buyers, Forever 21 has stayed true to its cheaply-produced, low-priced trading roots. While Zara has put up the fashion game (and the prices), Forever 21 has not kept pace, according to experts Yahoo Finance has chatted up.

And to add insult to injury, national apparel chains have focused on closing unproductive stores and downsizing others to make healthier profits.

LONDON, UNITED KINGDOM – 09/08/2009: Shoppers walk past a branch of Forever 21 store in central London. (Photo by Steve Taylor / SOPA Images / LightRocket via Getty Images)

Forever 21 has been slow to even do it. And as a result, there is really no reason for the chain to exist – too many better alternatives for consumers. For many other better positioned dealers from a basic perspective.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" First they lost the way to fashion – used to to be very quick at copying marks of higher end use. They became too many different – less impact on fashion, while quality went down, "longtime retail analyst Janet Kloppenburg told & nbsp; JJK Research Associates ." Also, the store's footprint just got bigger and they have some huge 20,000 square-foot stores. "" Data-reactid = "44"> "First, they lost their way to fashion – used to be very fast at copying brands of higher end. They became too different – less impact on fashion, while quality went down down, says longtime retail analyst Janet Kloppenburg of JJK Research Associates. "Also, the footprints of the stores just got bigger and they have some huge 20,000 square feet of stores."

So that's the whole mess.

Declining retail stores

So there are structural issues in retail that are undoubtedly pounding Forever 21.

First, there are still many retailers in America in the midst of the shift to online sh unproductive retail chains must – and will – be smelled when people reduce trips to physical stores.

It is likely that the shake in retail will be massive. Earlier this year, Investment Bank UBS estimated that as online retail penetration rises to 25% from 16% at the moment, around 75,000 stores will close the store by 2026. This makes up 7% or so of the 1,044,754 stores UBS says exist. [19659017] UBS believes that 21,000 clothing stores out of the 82,000 that exist will have to close.

If you are near a Forever 21 – which has not evolved – this store closure tsunami is likely to appear in front of your door. [19659019] The rise of Walmart and Target

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "I Meanwhile, the fact that low-cost stores such as Walmart ( WMT ) and Target ( TGT ) have become far better at giving customers what they want to wear – products are usually on trend and at good prices Remember that the very existence of mall-based specialty retail stores like Forever 21 was due to discounts and department stores being unable to sell good goods at reasonable prices. "Data-reactid =" 62 "> Meanwhile, the fact is that low-cost stores like Walmart (WMT) and Target (TGT) ) has become far better at giving customers what they want to wear. The products are usually on trend and at good prices. Remember that the very existence of malls-based specialty stores like Forever 21 was due to discounts and department stores unable to sell good items at reasonable prices.

No more. In addition, the discounts with their large supply chains are able to handle rising workers' wages in foreign markets and increased costs from customs duties. Fast-fashion's business model has long been assuming low prices due to low costs.

It disappears.

"The strength you see in retail is in Target, Walmart, TJ maxx. Real freelance retailers like Forever 21 and small mall-driven retailers are the ones struggling because mall shopping continues to erode. The discounts have bigger businesses and can counteract higher costs, "said Nick Giacoumakis, strategist at New England Investment & Retirement Group.

The writer on the wall for Forever 21 has long been clear. You just had to connect the dots.

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