Seams of trouble

FAST FASHION'S FUTURE HINGES ON SMART SUPPLY

- YISHAI ASHLAG

FROM ITS REIGN as a mall retailer's favourite store to its spiral into bankruptcy, Forever 21's story is a stark lesson in inventory management for all apparel retailers. Founded in 1984, it built a retail empire spanning 47 countries by seizing consumer attention with low-cost, trendy apparel. The company's decline began in 2016 when it expanded aggressively, and ventured into unfamiliar categories like cosmetics and menswear, requiring larger inventory.

The company's revenue started falling in 2016. It was a time when many retailers were downsizing stores, and moving to an omnichannel approach. Forever 21 did the opposite. The company opened large physical stores across the globe. It suddenly had too much inventory and too little time to sell it.