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Forever 21: End with cheap


The American textile chain Forever 21 is insolvent. Is the fast fashion business at the end?

Sustainability is the dominant theme of the present. Young people are protesting against the waste of resources worldwide. Activists danced in front of a Primark branch in Birmingham, UK, to draw attention to the excessive consumption that the low-cost fashion retailer is tempting their customers from their point of view.

Now plans to close its US counterpart to Primark, the fashion chain Forever 21, about 350 stores, the company has filed for bankruptcy. H & M and Topshop have already closed dozens of branches.

Has the concept of cheap fashion come to an end, because consumers shop sustainably?

Fashion chains such as Forever 21 from the USA, H & M from Sweden, Zara from Spain and Topshop from the UK rely on so-called fast fashion. Instead of twice a year, they bring almost weekly new collections in the shops. So they educated the customers to buy new clothes all the time. Especially for teenagers, the brands were very popular for a long time.

But the goods are mostly from Asia, where they are often produced under questionable working conditions. In addition to the difficult social issues, the fast-fashion industry also leaves ecological traces: The global production of clothing and shoes has roughly doubled between 2000 and 2015, according to a report by the British Ellen MacArthur Foundation. In 2015 alone, textile production emitted 1.2 billion tons of greenhouse gases, more than aviation and shipping together.

350 stores want to close Forever 21 The US fashion company had grown too fast

These problems are increasingly moving into the consciousness of customers. According to the latest Pulse of the Fashion Industry study, published by the Danish non-governmental organization Global Fashion Agenda, 75 percent of respondents from the US, UK, France, China and Brazil find fashion sustainability very important. Nevertheless, this view has little impact on their actions: Only for seven percent of respondents is sustainability the most important criterion when shopping for clothing. 23 percent consider good quality decisive, while 17 percent want to look successful.

For the bankruptcy of Forever 21, there are obviously other reasons than a more conscious consumer behavior of customers. The chain grew too fast according to own data. Within six years she expanded into 47 countries. According to the bankruptcy documents, the company recently ran more than 800 stores in 57 countries.

75 percent of respondents to a study find sustainability in fashion very important

Now Forever 21 wants to focus again on the core business in the US, where the South Korean couple Do Won Chang and Jin Sook Chang founded the company 35 years ago. Her rise was considered the epitome of the American dream. Just three years ago, Forever 21 made $ 4.4 billion in revenue. From Germany, however, the chain has withdrawn two years ago.

The fashion industry is still muddled by another trend: More and more customers order their clothes on the Internet. This is putting retailers like Forever 21 under pressure and forcing them to change their strategy, which has yet to succeed. Pure online competitors such as Amazon, Zalando and Asos rely solely on Internet sales, cutting off some of their customers' chains.

H & M has also been struggling in recent years with declining profits and is now investing increasingly in the Internet business. Likewise the competitor Zara, whose parent company Inditex announces increasing profits despite the upheavals in the industry.

The turnover of Forever 21 with the on-line business was so far only 16 per cent. That is probably another reason for the bankruptcy of the company. He has less to do with customers' desire for sustainability and more with the changing causes in the fashion industry.

Source: zeit

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