Company booming
Forever 21 is a retailer which means that its line of business is purely procuring apparel and selling them to the end consumer. Its current strategy for opening new outlets domestically is by renting space in popular and busy malls. To date Forever 21 has more than 150 stores in regional malls across the United States (RKF, 2009). Furthermore the company is an independent retailer meaning that the company has its own staff operating the stores in all the locations. And with healthy sales and pile of money, investing in new properties and acquiring failing stores is one of the characteristics Forever 21 is showing in this economic crisis.
And more recently the company’s trend is to purchase bigger and better stores to sell their merchandise (Bodamer, 2008). The good news for Forever 21 is that the above mentioned trends can all be perfectly achieved in the Chinese environment as well. Due to the recent financial growth of China in the last decade, financial hubs, trading centers, skyscrapers, malls etc. have sprung-up in mainland China like mushrooms. This creates a lot of space for Forever 21 to purchase and establish and dominate its brand name in the Asian market too. The question arises how to enter this market that is so inclined to ward off foreign investors.
The strategy is simple and that is aggressive stance to close any worthwhile deal available. The best option available is to acquire closing stores and setup base from where expansion can take place within China. This means that market penetration should begin by chain acquisitions and once established, an organic growth approached be used. They should opt for a ‘acquire and operate’ direct involvement strategy that would allow them to retain ownership of all the retail operations in the country. This is the same strategy that they have used to enter other foreign markets. (Kaiser, 2009)
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When Forever 21 started, it purchased its merchandise from the Korean wholesalers mainly in Los Angeles. However now that it has become a fashion retail giant, it takes samples from all over the world and uses private labels like Ire Fashions who supply trendy and unique designs only once or twice a year (FILUS & LEE, 2007). The basis of competition for Forever 21 today still is quick-turnarounds, which they thank the Korean style for, and cheaper prices for fashionable clothes. Gaining cheap labor and low costs is not an issue in China due to China’s significant resources.
However, to truly set the momentum for the ‘fast-fashion’ apparels, Forever 21 needs to identify prospective distributors who are dedicated manufacturers for the company only and then teach them Korean style to get the turnaround times shorter. The logistics and road infrastructure is already good and technology is at its best which needs to be tapped so that an integrated approach is used for all operations of the company. Utilizing the trusted methodologies used back in US, should be applied to get the customers wanting to come to the stores in China.
Even though the world is in recession, and fashion and trendy clothing seems out of budget for many people, Forever 21 sells them cheaper which attracts customers in these troubled times. Focusing on core competencies like selling and marketing, and outsourcing manufacturing and logistics through a planned vision will keep the company booming in times to come. References Bodamer, D. (2008). Forever 21 Wants Mervyns’ Real Estate. Retrieved July 27, 2009, from Retail Traffic Magazine: http://blog. retailtrafficmag. com/retail_traffic_court/2008/10/06/forever-21-wants-mervyns-real-estate/
FILUS, S. , & LEE, B. (2007). Forever 21 owes success to Korean-style quick turnaround. Retrieved July 27, 2009, from All Business: http://www. allbusiness. com/company-activities-management/company-structures/5512621-1. html Kaiser, A. (2009). Forever 21 Prepares Japan Debut. Retrieved July 27, 2009, from WWD: http://nicolefall. com/blog/wp-content/uploads/2009/05/forever-21-prepares-japan-debut-retail-news-including-trends-and-analysis-wwdcom1. pdf RKF. (2009). Forever 21 . Retrieved July 27, 2009, from http://www. rkf. com/case_17. htm
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