Forever 21 Reveals The Flaws Of Fast Fashion The most recent retail sales numbers suggest American consumers are pulling back. Forever 21 filed for bankruptcy and revealed some big flaws in the business model known as fast fashion.

Forever 21 Reveals The Flaws Of Fast Fashion

Forever 21 Reveals The Flaws Of Fast Fashion

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The most recent retail sales numbers suggest American consumers are pulling back. Forever 21 filed for bankruptcy and revealed some big flaws in the business model known as fast fashion.


This week's retail sales numbers suggest that the American consumer is spending less. That's especially true in what's called the fast-fashion sector. Stacey Vanek Smith and Cardiff Garcia from our economics podcast The Indicator From Planet Money explain.


STACEY VANEK SMITH: When I was just starting out in radio and I was making, like, very little money and was living in LA, where there was all of this pressure to be super stylish, you know, Forever 21 and H&M were like a miracle. It was called fast fashion - super-cheap clothes in all the latest styles. It was amazing. So when I read that Forever 21 had filed for bankruptcy, that it was closing a bunch of its stores and going to try to turn things around, I couldn't believe it.

CARDIFF GARCIA: Fast fashion dominated retail about a decade ago, and now a bunch of the big stalwarts are struggling. Now, Stacey, you were surprised to hear that the store had been struggling of late.


GARCIA: But Chana Baram was not surprised. She's a retail analyst with Mintel.

VANEK SMITH: I was like, oh, my God, I thought that place was bulletproof.

CHANA BARAM: Yeah. I think that maybe with part of the problem - is that, you know, they were very comfortable in thinking that, you know, they had this market cornered.

GARCIA: Yeah, and for a long time, they kind of did have the market cornered. I mean, their growth was explosive. And during the financial crisis, while other retailers were closing their doors, Forever 21 was still thriving.

VANEK SMITH: So what happened? Chana points out that a lot of the fast fashion old guard has been having troubles. H&M has been really struggling. And Delia's, The Limited, Payless ShoeSource, Aeropostale and Wet Seal all filed for bankruptcy this year.

GARCIA: Well, Chana says a few things are going on. First, consumers are not spending like they used to, and that has made things more competitive. And in this more competitive environment, Forever 21 has been losing ground to the new crop of online retailers - companies like Boohoo, ASOS, Revolve and Lulus.

VANEK SMITH: What is it that, like, Boohoo can offer that Forever 21 and possibly H&M can't?

BARAM: You know, really fast trends, really respond to what people are wanting.

VANEK SMITH: How often do trends change? Is it like - there are the, like, half-day fashions and stuff?

BARAM: It's, you know, responding to a specific event. That's really important. People are seeing stuff on social media. They want it. They're very influenced.

VANEK SMITH: So it's fast - it's quickness, actually. The old fast fashion isn't fast enough.

BARAM: Yes, in a way.

GARCIA: So that's the first reason that Forever 21 is struggling. It's just not fast enough. It is not responding to social media and reality TV the way that these other retailers are. And part of the reason Forever 21 is less fast, Chana says, is that it's dealing with so many physical stores - about 800 of them. And those stores are big.

The problem with this, Chana says, is twofold. First, all those physical locations make Forever 21 less nimble. But also, those stores are expensive.

VANEK SMITH: And it's not paying off like it used to. Chana says people don't want to spend their time browsing in giant stores anymore.

GARCIA: Online retailers like ASOS and Boohoo can stock small amounts of a lot of different things and respond to demand. The one exception, Chana says, is Zara.

VANEK SMITH: But it needs to get faster about responding to trends, faster with shipping and returns, and also, it needs to get a lot of the big, expensive stores off its books. Forever 21 does seem to be moving in that direction. It currently has more than 800 locations, and it's looking to close almost half of them.

Stacey Vanek Smith.

GARCIA: Cardiff Garcia, NPR News.


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