Dive Brief:
-
Fast-fashion retailer Forever 21 on Wednesday said it’s further expanding its even cheaper F21 RED chain, announcing plans for 40 new stores nationwide this year, according to a company press release.
-
The first three F21 RED stores are opening this month in San Antonio, TX, the Bronx in New York and Chicago. The discount chain will have 70 locations by the end of the year.
-
F21 RED, which is priced even lower than its flagship store, launched in 2014 with merchandise from Forever 21 and its sub-brands, including Forever 21 Men, Forever 21 Plus, and Forever 21 Girls.
Dive Insight:
Forever 21, started by a Korean-American family with a single Los Angeles store in 1984, is a private company, so hard numbers on its finances aren't easy to come by. But last year the fast-fashion retailer was said to be having trouble paying its bills after a massive expansion and the launch of the lower-priced F21 RED concept. The company said then that it would ease up on its expansion plans.
But none of that is stopping the retailer from adding 40 F21 RED stores nationwide. In total, Forever 21's store count includes over 815 locations in 57 countries.
In the midst of a volatile and challenging retail environment, many retailers are finding growth with off-price, discount or cheaper store units — just look at Nordstrom's Rack and Macy's Backstage efforts. Moody’s projects sector sales to rise between 6% and 8% this year, while operating income could grow at least 4%. Profit gains will likely be driven by increased top line sales, an expanding vendor base and more efficient supply chain operations, Christina Boni, vice president and senior analyst for Moody’s, told Retail Dive.
Linda Chang, VP of merchandising at Forever 21, said in a statement that the store format presents an opportunity for growth. "F21 RED expansion represents an important and exciting opportunity for our growth plan," she said. "[It] will allow us to bring a wide variety of product at competitive prices to new regional areas for our increasing customer base."
