Case

A case report on Forever 21 ‘s bankruptcy

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Course
INFO 10213

Institution
Mohawk College Of Applied Arts And Technology ( )

This report provides an in-depth analysis of the recent bankruptcy filing of the well known fashion brand Forever 21. The purpose of this case study is to understand the causes of the company's economic crisis, a thorough analysis and suggesting recommendations.

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Uploaded on November 6, 2024
Number of pages 7
Written in 2023/2024
Type Case
Professor(s) James flower
Grade A+

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Assignment No 1 – Business Case

A case report on Forever 21 ‘s bankruptcy

Presented by:

Student Name: Submeet Singh
Student Id: 000902373
Program: Project Management 299
Course: Information Systems Management
Date: 10th June 2024

Executive Summary

, Introduction: This report provides an in-depth analysis of the recent
bankruptcy filing of the well known fashion brand Forever 21. The purpose
of this case study is to understand the causes of the company's economic
crisis, a thorough analysis and suggesting recommendations.

Background and current situation: Established in Los Angeles in 1984,
Forever 21 quickly grew to popularity in the fashion industry. The
business's strategy was to provide fashionable, affordable clothing, mostly
to younger customers. With 815 locations all over 57 countries, Forever
21 has expanded to become a major retail brand. Forever 21 filed
for bankruptcy in September 2019, stating that it would close around 200
stores and exit from many international markets. The company's financial
problems are a result of a number of factors, including high operating
costs, decreasing mall traffic, and changing consumer preferences toward
online and sustainable buying. The annual occupancy costs of Forever 21
are high, putting a financial strain on the company's finances due to
leases and operating costs at unprofitable locations.

Problems and their impact: 1) The high expenses of large locations
has put financial burden to the company.
2) Their demand has been gradually decreasing as a resuslt of shift
towards sustainable fashion and competition.
3) Forever 21's market share has been reduced by the competitors and e
commerce giants.
4) Forever 21's primary sales were mainly from physical stores and have
seen a sharp decline in sales as a result of fewer shoppers in malls.
The organization has suffered greatly as a result which has led to lower
profits, a decline in market share, and lastly bankruptcy.

Market and Competitive Environment: The fashion industry is highly
competitive, and big players like Zara and H&M have managed to stay
strong by creating a balance between style, affordability, and a growing
focus on sustainability. E commerce is also becoming increasingly
common in the retail industry.

Recommendations: By creating unique, high-quality and affordable
products that fit current fashion trends and consumer values in order to
differentiate their company from the competitors. Also, to
attract customers, launch eco-friendly products and place a strong
emphasis on ethical sourcing.

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