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Major Fast Fashion Retailers Beware — Forever 21 Is Gaining On You

When it’s deliver-or-die, supply chains become the lifeblood of a company. To that end, the fashion industry has embraced technology to navigate today’s hyper-complicated supply chain, with myriad solutions shaping the first, middle and last mile. Call it Sourcing 2.0.

Fast fashion retailer Forever 21 is growing so fast that the privately-held firm is now a competitor to be closely watched by its industry rivals, according to analysts.

“Forever 21 is becoming too big for the specialty retailers to ignore,” industry analysts Paul Alexander, Lorraine Hutchinson and Jessica Lebo, of Bank of America wrote in a recent analysis of the rapidly expanding chain.

With more than 450 outlets in the U.S., and almost 100 retail outlets globally, Forever 21 is taking more market share from other retailers, say the analysts. Sales hit $3.5 billion, according to an estimate by BofA, on par with many another major fashion retailer to teens and young adults.

Already established in Europe and China, Forever 21 has targeted Latin America as its next market to penetrate.

Acquiring newly-fashionable inventory quickly and selling it at low prices, Forever 21 has put the heat on competitors such as Abercrombie & Fitch, Aeropostale, American Eagle and Gap, to name just a few.

Gap comparable store sales for February were up three percent, while for the same period last year, they were up four percent. Gap has already seen its sales decline and margins shrinking as Forever 21 flourishes with fast fashion turnaround, low pricing and repeat business, a strategy Gap is also pursuing, according to Margaret Bogenrief, a partner with ACM Partners, a boutique financial advisory firm.

Beyond affordably low pricing and fast fashion, Forever 21 is invading territory once held exclusively by the biggest players — prime real estate, rather than minor league malls and remote locations in the major malls.

The flagship Forever 21 store now stands at 1540 Broadway, Times Square in New York, facing its nearby rivals Aeropostale and American Eagle.

Finally, Forever 21 carries a wider line of products than some of its competitors, including plus sizes, accessories, jewelry, bags and wallets, hats, belts and sunglasses and eyewear, items which attract more customer traffic.

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