Is This The Death of Fast Fashion?

Written by Jennifer Clark
Posted October 9, 2019

Fashion trends come and go. We all remember being teenagers and making sure we fit in with the latest trends.

I remember planning out my outfit the night before my first day of high school. I wanted something I would feel confident in but not make me stand out too much. I wanted to fit in but I wanted to be unique, too.

As I grew older, my desire to fit in lessened, but I still wanted to be fashionable and feel confident. And retail changed. Every season, new clothing lines emerged with new trends. Fashion became even more affordable. In college, I started shopping at Forever 21 because it was both affordable and trendy.

Forever 21, a California retailer, and H&M (OTC: HNNMY) have become fast fashion leaders in the United States, changing fashion foreverBut in recent years, fast fashion has received a lot of negative attention as more concerns about its negative impact on the environment surface.

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The fast fashion industry has become one of the biggest polluters on the planet. Millennials and Generation Z have realized the huge impact it has had on our climate. These newer generations are fighting to reverse the effects of the pollution created by the generations that came before. Some think this shift towards awareness and "taking action" could be one reason behind the downfall of Forever 21.

Forever 21 Files for Bankruptcy 

Last month, the privately-held Forever 21 announced it would be restructuring and cease operations in 40 countries, including Canada and Japan, as part of its Chapter 11 filing. It also plans to close up to 178 stores in the United States — approximately 350 stores altogether.

The company says it plans to continue operating its website as well as its other U.S stores and its stores in Mexico and Latin America. Forever 21’s executive vice president, Linda Chang, said in an interview, "What we’re hoping to do with this process is just to simplify things so we can get back to doing what we do best… We went from seven countries to 47 countries within a less-than-six-year time frame and with that came a lot of complexity."

Forever 21 said its revenue had dropped to $3.3 billion last year, down from $4.4 billion in 2016. The restructuring could bring the company $2.5 billion in annual sales. Chang would like to keep merchandise below $50 to stay in line with its customer base and continue to attract those shoppers who are on a budget.

While some might point to Forever 21’s bankruptcy has the death of fast fashion, the company's bankruptcy is most likely due to growing too fast over a short period of time.

These “woke” generations still want their fast fashion, especially since the cost of living has increased and they're incurring a lot more debt than previous generations. A reasonably priced pair of jeans or dress is ideal. Of course, buying secondhand is an option, but finding the thing you're looking for is a little more difficult than popping into Forever 21, H&M, Zara, or Old Navy. 

Yes, I think these companies need to find better ways of making their products for both the workers and the climate, but I don’t think these retailers will really be affected if they don’t adjust to more eco-friendly manufacturing procedures.

Forever 21 grew too fast. I think having fewer stores and focusing more on the e-commerce site would be equally beneficial to the company. 

We’re not seeing the death of fast fashion; we’re seeing a new way to operate fast fashion.

Until next time,

Jennifer Clark
Pro Trader Today
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