Why did Forever 21 file for bankruptcy? Hint, it isn't because fast fashion is dead.
In this episode:
◇ There are three major reasons why Forever 21 went bankrupt - and it isn't because fast fashion is dead. H&M and Zara continue to report great results. So why the difference?
I received over 100 messages about Forever 21's bankruptcy. I wonder if many have read about the business because they speak as if they will cease to exist. Now, the company is closing most of its international business - operations in 40 countries, including Canada and Japan.
However, the company is expected to still maintain half of its US fleet or just below 178 stores. Forever 21 is retreating to its core, paring down-home decor, electronics and cosmetics, and the company's other brands like Riley Rose.
There are three reasons analysts attribute to the company's decline: The first is shifting customer values: younger consumers are spending more on second hand or rental goods to find sustainable solutions. While there certainly is a value change, Zara or H&M's annual report are indeed not suffering much, yet, because of this. The two fast-fashion behemoths are still speaking emotionally to their customers about sustainably - and maybe this is where Forever 21's miss was.
Some analysts cite declining mall traffic, and this is undoubtedly a piece of it, but Forever 21 itself is not driving traffic as it once did in those malls. This likely overlaps with the rise of digital (Forever 21 does about 16 per cent of its sales online, which isn't insignificant).
The third potential reason for the company's decline is their quick expansion - perhaps beyond what the market could bear. In six years, the company grew from seven countries to 47. New international markets add much complexity to business and make less efficient use resources.
However, despite the myriad of sad, and happy messages I received on the news of Forever 21's bankruptcy, they are still expected to generate $2.5 billion in sales a year after restructuring. It's hard to believe this business is still family-owned!
◇ Stylepull is a platform that puts stylists in control - pursuing branded product without the pressure of PR teams.
This next story is a bit of a throwback to my days as an intern: Stylepull has soft-launched in the US, a platform that showcases apparel for easy discovery by stylists.
The platform is accessible by membership only and intends to put the power back in the hands of stylists, who can select what they want without the pressure from a brand's PR team. Is this the first platform that serves industry production (a sector of the industry which has been undergoing considerable change as fashion media shifts from print into digital formats)?
The logistics still need to be coordinated by the brand and stylist - and brands only have a day to respond to stylist requests.
Brands can pay $500 a month for membership. The platform has 150 stylists signed up.
◇ Levi's made big investments in the future with climate week announcements and in wearable technology.
Levi’s smart jacket “Project Jacquard”, with Google.
Levi's has had a big week. During climate week Levi Strauss & Co. revealed it would devote more than $380,000 to fund future apparel leaders in its "The Collaboratory" fellowship program. The company is also teaming up with Mastercard, VF Corporation, and Marks & Spencer to help digitize garment worker pay, and grow financial literacy and planning of the workers.
Levi's then unveiled a new wearable technology collection, in partnership with Google, which started in 2016 as Project Jacquard. Woven conductive fibres upgrade the company's traditional denim jacket and pair it with the Jacquard app on the wearer's phone.
Nearly invisible, the result is a woven touch interface system that is useful without being obvious. The San Francisco-based heritage brand maintains its aesthetics while continuing to explore technology-enabled garments.
The functionality includes "find my phone" and the ability to activate "always together" to get an alert when either phone or jacket is left behind.
Wearers can also pre-program an address in "Navigation," toggle between media features and even enable the "Camera" function to take selfies from a distance with just a tap of the wrist.
The collection is available in both men's and women's classic trucker and sherpa trucker styles. As for what's next, Levi's Dillinger said to expect new, useful abilities every few months — "so the jacket keeps getting better, season after season."