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Packing Up Shop: Forever 21 Exits Chinese Market

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By Published On: May 2, 20190 Comments

The American fashion giant is joining brands like Topshop and Marks & Spencer by closing its digital store in the Chinese market.

The North American fast fashion business is saying goodbye to the Chinese market while cutting ties with Tmall and JD.com. It currently has 11 stores open in the country but will shut both its brick-and-mortar stores and has shut its e-commerce platform completely.

Founded in 1984, Forever 21 produces on-trend clothing pieces around the globe with stores in Australia, Europe, and the US. The fast-fashion chain was re-introduced to the Chinese market in 2011 with Tmall after an unsuccessful effort in 2008. However, its multi-storey flagship store in Hong Kong subsequently closed in 2016.

According to a notice on its homepage, the Californian label has also indicated that it will close its remaining stores throughout the country. Earlier in March, Forever 21 closed the final store in Taiwan, exiting the Taiwanese market completely. 

Forever 21’s e-commerce platform is officially closed.

This comes after the retailer closed two of its stores in France in late 2018, leaving behind a single flagship in Paris. Forever 21 has also recently downsized operations in the UK and Irish market, announcing the closure of its store in Dublin. According to its most recent accounts filed with Companies House, Forever 21 made a loss of AUD$53 million in the year to 28 February 2016 in the UK. 

While there are other non-Chinese brands that have been introduced into the market, including Tiffany & Co. and Hermès, many companies such as Topshop, ASOS and Marks & Spencer have ceased operations since opening. Shanghai-based branding specialist, Wu Junyan noted that Forever 21’s failure was inevitable, and could be attributed to its lack of marketing strategy for its overseas market and poor commitment level. “Its prices are low, but its offline shops are too big, with high operating costs,” he said.

The departure may also be attributed to large competition from other fast-fashion brands like Zara, Urban Revivo and Taobao. Forever 21’s online store officially shut on April 29, with extensive sales hitting physical stores.

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