US retailer's bankruptcy filing shows limits of fast fashion

Fast-fashion retailer Forever 21, which has filed for bankruptcy, joins a growing list of brick-and-mortar companies that have seen sales hit by the rise of competition from online sellers like Amazon and the changing fashion trends led by millennial shoppers.

Forever 21, the privately held company that helped popularise trendy and cheap clothing, has fallen out of favour with shoppers, in part because of other retailers like Sweden's H&M and Spain's Zara which churn out affordable styles similar to those seen on designer runways.

Younger, more environmentally conscious shoppers are also choosing brands that source garments ethically, instead of retailers that use cheap fabrics to make T-shirts that are sold for US$5 (S$6.90).

Resale sites like thredUp.com - which calls itself the largest online thrift store - have also been growing in popularity.

Sales on the Forever 21 website yesterday included tops that started at US$3, as well as dresses, handbags and jewellery, and pants for US$20 and under.

Ms Gabriella Santaniello, founder of retail research firm A-Line Partners, said the bankruptcy would likely create pressure on other clothing retailers as Forever 21 slashes prices to clear inventory.

The chain did little to differentiate itself from others, she said. "It used to have a bit of an older customer (base), but customers have become more conscious of where they spend their dollars."

Mr Michael Lambert, 33, who was visiting from St Petersburg, Florida, said: "I don't know if I would shop here if it wasn't for quick fixes (like white T-shirts and other basics)."

Ms Sommer Reling, 25, said of clothing from the chain: "You wash it once and it's beat."

REUTERS