Forever 21 – the seller of $6.90 crop tops – is closing its Hanford store.
The Forever 21 at Fashion Fair in Fresno will remain open, along with the stores in Visalia and at the Tulare Outlets. But the Hanford Mall store closure is a sign of bigger changes for the handful of giant stores Forever 21 opened in California, and a general shake-up happening in clothing stores geared toward teens and young 20-somethings.
The 80,000-square-foot Forever 21 in Hanford took over a former Gottschalks in 2009, just a month after the department store closed. Now Forever 21 plans to close in early April, putting at least 51 employees out of work.
Forever 21 made a splash in the Valley years ago, opening several giant, often three-story stores it picked up when Gottschalks and Mervyns went bankrupt.
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It was experimental. They were testing things.
Neil Saunders, Conlumino CEO
At Fashion Fair, the retailer left its 14,000-square-foot store in the middle of the mall and took over the former Gottschalks, all 150,000 square feet and three stories of it.
Forever 21 stocked such stores with its $7.90 skinny jeans and other casual wear, but also added girls clothing, plus sizes, a men’s department, office clothes for women and an expanded basics department stocked with tank tops and T-shirts.
The chain’s core customers are between 15 and 35, with a “sweet spot” of 21- to 24-year-olds, a company executive told The Bee in 2011.
The chain is still a leader in “fast fashion,” with a constantly updated mix of cheap of clothing that is trendy but not high quality.
Forever 21 still hopes to lure customers back repeatedly into the store with the latest trends: Native American-inspired dresses with fringe, skin-baring tops, sweatshirts with panda faces and shorts with bold prints that will be out of style next year.
No. 2Forever 21’s ranking on list brands preferred by teens in a spring 2015 Piper Jaffray study.
But the experiment with mega stores appears to be over.
The retailer has been downsizing, blocking off the third floor of the store at Fashion Fair. It also recently scaled back its weekday hours from 9 a.m. to 10 p.m. to 10 a.m. to 9 p.m.
Forever 21 stores in former Gottschalks stores in San Luis Obispo and Riverside have closed. The Yuba City store is set to close April 1 and the retailer has been closing other large stores in England and other countries.
“Forever 21 has a very poor understanding of how to make space work,” says Neil Saunders, CEO of Conlumino, a New York retail research and analysis firm.
Bigger isn’t always better.
“Forever 21 has a view that having a lot of stuff in one store means people would buy more ... and as they evolved they realized it doesn’t work out quite like that,” Saunders said.
But Forever 21 is not alone. Plenty of teen retailers are struggling these days, facing a slew of challenges.
Competition is strong for young people’s dollars, especially with super low-priced and trendy stores such as H&M and Forever 21. Together, they are stealing customers away from older mall stores such as American Apparel, Abercrombie & Fitch, Wet Seal and others.
More young people are shopping online, which means fewer are in the stores. And there’s more competition from online-only retailers such as ASOS.
And more of young people’s dollars are being diverted away from fashion to gadgets these days: cellphones, apps, games, etc., notes Saunders of Conlumino.
$2.90cost of a pair of flip flops at Forever 21
Some retailers simply have too many stores in the age of the Internet and stiff competition.
That’s likely why Urban Outfitters saw slipping sales last year. It closed its Fashion Fair store last spring and the space is still empty.
It’s also why we’ve seen Wet Seal close two-thirds of its stores – including two experimental plus-size stores in Clovis and Visalia – but leave stores open at Fashion Fair and at Visalia Mall.
Abercrombie & Fitch, American Apparel and American Eagle have also closed stores.
But none of this means Forever 21 is headed for collapse. Closing stores is generally considered healthy because it cuts back on expenses. Since Forever 21 is privately held and doesn’t report earnings, there’s no way to tell how it’s doing.
But according to Saunders, the chain is doing reasonably OK – but the experiment with massive stores is over. The company is now opening new stores called F21, which have even cheaper items in smaller stores.