Bankruptcy Blues: Closing the door on traditional shopping

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There are less than three months left in 2019, and the number of retailers closing their doors continues to grow around the country. Big name companies like Payless ShoeSource are either filing for bankruptcy protection to stay afloat— or are unfortunately forced to close up shop for good. 

The latest major retailer to file for bankruptcy is Forever 21. Forever 21 is a women’s fashion retailer with more than 700 stores in countries across the world, including North America, Asia and the United Kingdom. It offers the latest trends and must-have styles all at affordable costs. The company’s website states it sold $700,000 in sales in its first year, growing to nearly $3.4 billion in 2017. It is also displays that Forever 21 is the fifth largest specialty retailer in the United States. So if the company seems to be generating revenue, what could have led them to financial trouble? 

Forever 21 was founded in 1984 in a suburb right outside of Los Angeles. It opened as family business “Fashion 21” by a couple that immigrated to the U.S from South Korea. The brand originally sold clothing, shoes and accessories solely for the young teen/adult consumers. The goal was to let the average person mock a celebrity’s style, but at a more affordable rate. This technique and the proximity of the original location allowed the owners to start franchises, opening a new one every six months. But over the years of expanding and getting established under a new household name, Forever 21 began to shy away from its roots. With the introduction of online shopping, the clothing company decided to incorporate men’s clothing and even household items just to keep up with the competition. The change was not worth losing its prime base audience, pushing a lot of consumers out of aisles and on the internet to shop.

Forever 21 is not the only retail company suffering a financial loss though. Another mall staple, H&M is fighting to keep doors open. The once popular store teens would flock to, is now becoming a last resort for fashion, especially as mall service continues to decline entirely. Many online boutiques are kick starting on social media, and then using ambassadors to drive traffic to the site. FashionNova, Missguided and OhPolly are some of the new stores taking over Instagram alone. I do most of my shopping through these retailers matter of fact. 

 Not everyone is opting for an app and giving up on the traditional style of shopping. Mesa student Lisbeth Urias is not an online shopper, and prefers going to Fashion Valley to pick up the latest trendy merchandise. “When I shop at Forever 21 it’s only for basic stuff. I want to make sure everything is true to size.” Urias adds “Everything is going online, making us lazy. Carla Telles joined the conversation sharing, “I am the type of person that needs to go try it on, because if it doesn’t fit I don’t want to pay to have to return it.” 

To combat this issue, there are boutiques such as StitchFix that let people try on a certain number of outfits and decide if they want to keep them. Each month, a box is delivered to the subscriber that contains items picked out by a personal stylist based on questionnaires. The subscriber then chooses what he or she wants to keep and only pays for those certain items. SDSU alum Reina Valenzuela is an avid user of this service. Valenzuela shares,”I like StitchFix because it’s convenient. I don’t have to wait in long lines or deal with parking at the store.” She says outlets like Forever 21 are more of a “now” factor when two-day shipping is no longer an option.

So where does Forever 21 go from here as online stores continue to dominate? They either change up the products being offered to gain back loyalty with its audience, or start marketing themselves more heavily online. As of now, the owners are downsizing some of its locations. In a letter to customers on its site, the company addresses the rumors of financial trouble, confirming that changes are being made to strengthen the structure of the company.

 

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