This is Forever 21’s first new store since it was acquired during the epidemic, revealing the willingness of this brand that has experienced bankruptcy and acquisition twists and turns to start over.
Forever 21 CEO Daniel Kulle said: “We are excited to emerge from bankruptcy in the new year and continue to grow the business to meet the new needs of our customers as we further build out our stores Network.”
It is reported that the store covers an area of 24,440 square feet (approximately 2,271 square meters) and provides more than 60 new positions.
This is the first time we have filed for bankruptcy reorganization in 2019 Since then, Forever 21 has rarely released exciting news.
Forever 21 was founded in 1984. Its Korean founder Zhang Dongwen and his wife brought the brand to the United States. With its sweet and lively style and affordable prices, Forever 21 quickly spread across the United States and expanded to the world.
According to court documents filing for bankruptcy reorganization, Forever 21 expanded from 7 markets to 47 markets in 6 years. The rapid expansion put the company in trouble. to overcome the business dilemma of weak successors.
“Bloomberg” reported that although the brand had 262 stores in markets outside the United States in 2015, due to the differentiated aesthetics and operating environments of various markets , it was difficult to achieve economic benefits commensurate with the scale at that time.
Forever 21 found it difficult to maintain operations and did not want to give up the brand. In order to avoid liquidation, Forever 21 filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in September 2019. According to the provisions of the Act, the debtor can continue to operate its business during this period.
This gives Forever 21 a chance to breathe and recuperate. In order to repair the bitter consequences of blind expansion, Forever 21 gave up these overseas markets without hesitation.
According to “Bloomberg” reports, Forever 21 was losing $10 million per month in Canada, Europe and Asian markets at that time, and only the domestic market in the United States performed relatively strongly.
Therefore, Forever 21 has gradually withdrawn from these games. It has incurred losses in overseas markets and has cut 178 stores in the United States, but it stated that it “will not withdraw from any major market in the United States.”
In February 2020, after a five-month bankruptcy journey, Forever 21 was officially acquired. The buyer is the SPARC Group F21 consortium composed of the brand’s two major owners, Simon Property Group, Brookfield Properties, and brand management company ABG.
Interface Fashion once analyzed that in this acquisition, Forever 21, which has weak performance growth and is burdened with external debts from suppliers, has no room for maneuver and lacks other bidders. s Choice. Therefore, Forever 21 could only agree to the ultra-low offer of US$81 million made by SPARC Group F21, and this price was not even enough to repay the supplier’s debt.
Forever 21, which welcomed a new owner, was also New managers assigned. Shortly after the acquisition was announced, Daniel Kulle, former president of H&M North America, was appointed CEO of Forever 21.
Recently, Daniel Kulle said in an interview with Women’s Wear Daily that when he first took over the brand, he faced disappointment with suppliers and real estate developers. , store operators reaching settlements, and the difficulties of re-establishing warehouses.
What is even more difficult is that when he was just beginning to prepare to “show off his talents”, the United States began to implement a blockade due to the spread of the new crown epidemic.
In the aforementioned interview, he said that in order to revive the brand, the company has made many reforms from products to marketing to reshape the brand image, including the recent We also organize activities on social issues that consumers care about, such as black history and women’s history.
“In many people’s minds, if you go bankrupt, you have to change the narrative related to the brand.” He said.
It can be seen that Daniel Kulle has already expressed his pride that Forever 21 has survived the bankruptcy crisis and the impact of the epidemic.
According to the announcement issued by ABG at the time of the acquisition, the group still has not given up on looking for opportunities to expand Forever 21 to key markets such as China, Europe, and Southeast Asia.
Opening a store in the main market, the United States, is just the first step for this brand to make a comeback. Perhaps Forever 21 will appear in China for the third time in the future.
It is worth noting that Forever 21 opened its first store in Jiangsu in 2008, but soon realized that the location decision was wrong and quickly withdrew from the Chinese market. . In 2011, Forever 21 entered China again and opened only 20 stores in just eight years, far behind the huge store network of similar fast fashion brands.
The two sad exits confirmed that Forever 21 never seemed to understand China’s market demand.
In fact, after nearly ten years of development, China’s clothing market has long been different from the same. With the emergence of innovative technologies such as flexible supply chains and the rise of online brands, Forever 21 may not have another chance if it wants to enter China again.
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