Forever21: India'S Management Rights Have Changed Hands Again.

After the rapid expansion, facing the economic downturn,

Slowing down, the United States

company

Inc. may be encountering systemic risks and problems.

Since last September, when the cash flow was exhausted, the problem of Forever 21 Inc. operation and the problems between suppliers and freight service providers should be further considered.

After the outbreak of major market problems in Europe and America, its Asian situation is also not optimistic. At the beginning of this month, Forever 21 Inc. changed its franchise partners third times in the India market.

This Tuesday, India retailer Aditya Birla Fashion and Retail (hereinafter referred to as ABFRL) became Forever 21 Inc. in India market new partner, replacing the previous India franchisee Diana Retail DLF DLF (hereinafter referred to as).

At the cost, ABFRL will pay DLF $26 million, and the two sides have signed the negotiation agreement by the end of May.

In the last fiscal year, Forever 21 revenue increased 23% to 2 billion 620 million rupees in India, or about 39 million US dollars. In the 2014 fiscal year, the brand India earned only 1 billion 50 million India rupees in India.

The brand competitor, Zara in the last fiscal year, earned 7 billion 200 million India rupees, or about $107 million 200 thousand, and Zara partners in India were Trent Ltd., a retail subsidiary of Tata Group of Companies Tata group. The two sides established a joint venture Inditex Trent in India and operated 16 stores.

The H&M Hennes & Mauritz AB (HMb.ST) Hayne Maurice group H&M H&M also entered the India market in early October 2015, and now has 6 stores, and plans to add 6 new businesses in the current fiscal year. In addition, Gap Inc. (NYSE:GPS), the same brand of Gap Inc., has opened its first store in India in May 2, 2015.

At present, several well-known fast fashion brands are only Uniqlo UNIQLO, but not in India. But India Prime Minister Narendra Mo and Uniqlo UNIQLO parent Japanese clothing giant Fast Retailing Co. Ltd. (9983.T) fast Marketing Group Chairman Liu Jing Zheng met in 2014. Liu Jing is considering purchasing clothing products from India, and opening shop is also under consideration.

DLF has previously operated 12 Forever 21 stores in the India market. After the completion of the paction, ABFRL hopes to expand the India store to 20 in the current fiscal year.

Zhang Dongwen, founder and chief executive of Forever 21 Inc., hopes that India will become the third largest market of Forever 21, and that the rapid growth of India's economy will help the brand to establish a 1 billion dollar market in India.

The goal can be grand, but it is clearly not a good phenomenon for Forever Inc. 21 to replace the regional operators frequently.

Forever 21 Inc. launched its low-cost brand Red F21 in 2014, and released its three year expansion plan. The medium-term target was 1200 in 2017, with an annual revenue of 8 billion US dollars. The company now has about 70% of its revenue from the local US market.

However, a year after the ambitious medium-term goal, Forever 21 Inc. was hit by a cash flow problem.

The operational difficulties of Forever 21 Inc. have been tracked. There have been reports of brands coming out of the Scotland market, delaying suppliers' payment, closing half of stores in the UK, leaving CFO, and the fact that their freight service companies have applied for bankruptcy due to half of the Forever 21 Inc. business.

In addition to obtaining Forever 21 operation rights in India, it is reported that ABFRL will also carry out brand business in India market.