1 – Light at the End of the Runway
It seems there is still hope for Forever 21, one of the world's fast fashion giants, which has been under a bankruptcy protection process (similar to judicial recovery under U.S. law) since September of last year. The company received a purchase offer of $81 million from a consortium led by shopping mall owner funds Simon Property Group and Brookfield Partners.
The idea, in principle, seems sound, as Simon and Brookfield are Forever 21's largest landlords, given that the majority of the chain's more than 700 stores — over 500 of them — are located in shopping malls across the United States.
The company expanded rapidly, growing from seven to 47 countries in just a few years, significantly increasing operational complexity. Another factor that affected the store's business model was the shift in consumer habits — shoppers have been visiting large flagship stores in major city centers and malls less and less, and increasingly turning to e-commerce. Retail in general, particularly traditional (and less agile) department stores, has been losing ground to more innovative brands.
Forever 21 announced it would close 350 locations (180 in the U.S.) and is expected to exit international markets such as Asia and Europe, though it is set to continue operating in Latin America.