Fast Fashion Brand Forever 21 Seeks $150 Million In The Face Of Economic Crisis

The United States, which has been developing rapidly. Fast fashion Clothes & Accessories Retailer Forever 21 Inc. has been seeking loans from outside investors at a time of slow growth. The expansion has also forced the group to try to reduce the size of its stores.

The Wall Street Journal quoted the news that Forever 21 Inc. is very low-key in discussions with Wells Fargo & Co. (NYSE:WFC), Wells Fargo and Private Equity Firm TPG Capital to negotiate a loan of $150 million. Forever 21 Inc. Inc. expects revenue to grow by 10% to 4 billion 700 million US dollars this year, but sources said that the pace of growth has gradually stopped, and the same store sales have plummeted to negative growth over the past 2 years due to the fact that productivity has not kept up with the growth of large retail stores. Meanwhile, RBC Capital Markets analyst Brian Tunick also estimated that Forever 21 is also dealing with the problems faced by other young retailers.

People familiar with the matter said that Forever 21 Inc. was also facing the same difficulties in Europe, so it hoped to buy some European stores' lease by obtaining new credit lines and using cash flow from operations. In terms of local stores, the company is reducing the size of the 100 thousand square foot store in Tacoma Mall, Tacoma, Washington, and the Simon Property Group.

Forever 21 Inc. now has more than 720 stores in 47 global markets, and plans to add 150 stores in the next two years. The mid term target is to reach 1200 stores in the world in 2017, with an annual revenue of 8 billion US dollars.

The company will only enter two new markets in Taiwan and Egypt this year. As for mainland China, Jatin Malhotra, director of global expansion of Forever 21 Inc., pointed out earlier that WWD was the most challenging market, because it was impossible to predict the performance of other second-tier cities. There are 11 Forever 21 stores in mainland China, and 5 more will be set up this year.

In order to catch up with the ever expanding scale, Forever 21 Inc. has been working hard to expand product categories and new product lines. Men's wear Footwear, handbags accessories, underwear swimwear, home furnishing clothes and cheap concept F21 Red. The company has been targeting more mature consumer groups since the autumn of 2015. It hopes to break through the fixed image restrictions given by the "Forever 21" brand name, maintain the attraction of the growing millennial generation with more relaxed tailoring and more mature costumes, and get a share from their higher purchasing power, otherwise they will only be faced with the risk of abandonment.

The brand development of Forever 21, which was founded in 1984 by the Korean couple Don Chang and Jin Sook in Losangeles, has been controlled by two people for more than 30 years, and the advantage is that it is not necessary to announce the performance to Wall Street nor to be responsible to investors, which is conducive to maintaining flexibility.