Retailers having been shutting the doors of underperforming stores in the hundreds in recent months. The latest retailer to face the heat in this especially tense economic climate is Forever 21, a popular Los Angeles based clothing retailer. The fast fashion chain will be shuttering around 200 of its locations, including its popular Reno-Sparks locations.
These closures to do not come as that much of a surprise all things considered. Retailers across the sector have been struggling for months now and during these tense economic times of increased cost of living expenses, many consumers make the decision to go without additional luxuries like new clothing or eating out at restaurants. This, of course, leads to underperformance in sales at these non-essential type retailers which then leads to store closures so as to minimize losses as best the company can.
Say goodbye to more than 200 Forever 21 locations
Reno-Sparks will soon be left without a single Forever 21 location as the Meadowood Mall and Outlet at Legends locations are set to close. The final closure dates have been slated for sometime in either April or May, depending on how quickly the sale stock at these locations can be sold.
As sad as the closure of any store is, there is a bittersweet silver lining to this grey cloud in the form of closing down sales. Retailers need to get rid of excess stock when shutting the doors of locations on such a large scale and as such, the inventory is often marked down significantly.
On March 12, the Meadowood Mall and Outlet at Legends offered a storewide discount of 30%. Additionally, all clearance items were marked down by 50%. As of Thursday March 13, the discounted rates were increased to 40% across the store and 60% for clearance merchandize, according to an employee of Forever 21. Additionally, the retailer’s online store has a sitewide 70% discount on offer.
Customers should also note that April 5 is the final day to redeem any gift cards. All sale purchases are final and no returns or exchanges will be processed.
Is this the beginning of the end for the fast-fashion chain?
It appears that downsizing its real estate footprint is not the only major decision made by the company in recent weeks. In addition to shutting the doors of more than two hundred of its branches across the country, the retailer will also be enacting layoffs at a corporate level.
The company has planned to close its corporate office based in Los Angeles and as a result, 350 employees will be facing layoffs. These major decisions were revealed in a Worker Adjustment and Retraining Notification dated for February 14.
The fashion outlet previously had the market cornered on trendy yet cheap fashion for both men and women. However, with the rise in popularity of international fast fashion brands like Shein and Temu in recent years, the company has been struggling to keep up.
“This decision was not made lightly,” a Forever 21 spokesperson shared in a statement made to USA TODAY. “And we remain committed to transparency and fair treatment of our employees during this period of transition.”
Additionally, Forever 21’s operating company, Catalyst Brands, revealed that it is keeping all of its options open and as such, a potential sale could be looming on the horizon.
According to The Wall Street Journal, the company is exploring this idea of a sale with the hopes of avoiding bankruptcy during these precarious times.
The Forever 21 chain presently has 359 stores spanning the U.S. and of these, 200 will be closed. At its peak, the company operated more than 500 stores. The retailer will not be disappearing for good, however. Instead, a “more digital-first platform” approach will be implemented, likely in order to compete with the likes of Temu and Shein.