Have you seen an F21 by Forever 21 store recently and thought to yourself "What's that all about?" Well, it's Forever 21's new concept store which offers the retailer's existing collections at a much cheaper price point. If now you're thinking "Seriously, can they go any cheaper?" then we are on the same page. To answer that question, yes, they can and they have gone cheaper with tank tops going for under $2 and jeans for $8. Now, if you're thinking "Woah!", yeah, me too.
It's such an unusual strategy and so different than what we've come to expect from fast fashion retailers. Most of their competitors like H&M or Topshop prefer to team up with luxury brands or high-end designers. It's a strategy that puts the luxury brand's price point within reach of the trendiest customers without diluting their brand and honestly, mass market is where the real money's at. It's a win-win for both parties and a formula that has lasted since Stella McCartney teamed up with H&M over a decade ago.
Forever 21, on the other hand, rarely teams up with big designers and honestly, never really seemed to need to. This new strategy is more along the lines of luxury retailers like Nordstrom or Saks with their Nordstrom Rack and Saks Off Fifth stores. Still, those retailers are offering higher-end items at attainable prices, but Forever 21 is already super-affordable. I mean, jeans for $8? Those are bargain basement prices.
So why this new direction? Is F21 trying to steal business from mass market retailers like Wal-Mart? Say what you will, but a lot of people shop for clothing at Wal-Mart and it's a pretty lucrative part of their business. But can you imagine Walmart having a standalone clothing store? Forever 21 has a strong brand name and may attract customers who want access to a cool brand, but at equivalent bargain basement prices. Who knows? It's all speculation on my part, but it's going to be interesting to see if this idea really takes off. It'll say a lot about the current retail climate. Luxury price points are the highest they've ever been, but at the other end of the market clothing is getting cheaper and cheaper. It's like the are we too fat or too skinny debate.