Forever 21 Is Tearing it Up

These days around here we’re usually writing about chains closing stores or tapering back growth plans. So it was refreshing to read this Los Angeles Times article about Forever 21’s aggressive expansion.

The retailer, which focuses on selling affordable apparel to young women, is opening a 90,000-sf three-level store in Times Square next year, and executives predict revenue will jump from $1.8 billion this year to $2.5 billion in 2009. The 400-store chain is also looking abroad with openings to come in Asia/

We can’t track down same-store sales numbers for the chain as it is private, but its growth comes at a time of volatility for publicly traded apparel chains. For example, same-store sales at Gap Inc. chains dropped 14% year over year in May, while Limited Brands stores had a 6% slide.

Can Forever 21 keep up its growth and good fortune or is the industry so unpredictable any more that there is no longer any way to tell?

4 Responses to “Forever 21 Is Tearing it Up”

  1. 1 Caffeinated Charlie June 24, 2008 at 9:44 am

    If they are going after the 20-somethings they are hitting the right market. While many of us in the 30+ (and much older) range are struggling to pay the mortgage, put gas in our cars, put food on the table or care for either our children or our aging parents; I know consumers in the 20 to 30 range who still have money to spend on clothes and entertainment. It may be a little tougher for them, but I am aware of so many in this age group who believe that having the latest clothing is still a necessity and a non-fat-venti-caramel-macciato is its own food group that must be consumed on a daily basis.

  2. 2 TeenyTiny June 24, 2008 at 10:43 am

    Forever 21 can continue its rampant growth because they are not a publicly traded company and do not have to report according to GAAP; as such, they are not accounting for Deferred Rent in their financial proformas (if they even use them). If they were to be bought out by a company that must use GAAP, their profitability would be shot, and they no longer would be the star that they are right now.

  3. 3 Gigi33 June 24, 2008 at 4:07 pm

    I’ve been into their stores and while I see alot of foot traffic, their clothing looks and feels cheap. Most be in the wrong demographic group.

  4. 4 MallMaven June 25, 2008 at 10:32 am

    Forever 21 has some serious issues regarding their blatant copying of designers. Many times, they’ve copied designers’ designs so closely, that they are pretty near exact of what is shown on the runway. Also, they can turn around the design so quickly, they often beat the original designer to market. They already have numerous trademark/copyright infringement ongoing lawsuits with Gwen Stefani, Gloria Vanderbuilt, and many others. They’ve also had some lawsuits regarding labor issues that aren’t favorable to the company’s reputation. It’s only a matter of time before their bad Karma catches up to them. It is unfortunate that the system rewards this kind of behavior in corporations and oftentimes penalizes corporations who follow honest business practices.

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