Dive Brief:
- Forever 21 has been dropped by EZ Worldwide Express, its exclusive shipping partner for apparel deliveries to at least 171 of its more than 700 stores.
- EZ Worldwide Express (which has been in bankruptcy proceedings since January, according to the Wall Street Journal) alleges that Forever 21's business, which had been responsible for about half its revenue ($25 million to $30 million), had slowed so much that the contract could no longer be supported.
- EZ Worldwide still plans to seek an exit from bankruptcy by focusing on a limited number of retail accounts, including Wal-Mart, Disney and H&M.
Dive Insight:
It sounds like EZ Worldwide is the company in this scenario with the real problems, but if the information coming out of its bankruptcy proceedings is accurate, a major downswing in Forever 21's business is at least partly to blame. (The retailer didn't comment for the WSJ story.)
That would not come as much of a surprise, considering the fast fashion retailer has been struggling since at least last year, amid reports of downsizing and slow payments to its vendors.
Forever 21 and other fast fashion retailers had a good run by managing to combine bargain pricing with an ability to keep up with rapidly changing fashion trends. That success drove Forever 21 and others to quickly expand—too quickly, it is now apparent—into new markets and locations.
It's been said that some fast fashion retailers have simply not been able to keep up with changing styles and inevitable generational changes among their audience. Forever 21 may be experiencing that now. While it sounds like EZ Worldwide at least has a plan for how it might exit bankruptcy and focus on a handful of key clients to attempt a rebound, it will be interesting to see what Forever 21 plans to stay afloat in a slower market for fast fashion.
