Forever 21's Bite into the Big Apple is Loaded with Juicy Profits
When Forever 21 throws open its doors in Times Square tomorrow, the LA-based fast fashion retailer will be doing more than taking Manhattan in its massive maw -â€" it will be setting a new standard for merchandising on a grand scale. Like its assortment of on-trend skinny jeans, shiny tops, and sparkly baubles, Forever 21's serving up a smart mix of site-specific retail elements and strategic concepts. Wannabe mega-brands and managers of ailing department stores should start taking notes.
Smart growth
While big box stores shuttered during the recession, Forever 21 was growing. Taking advantage of Mervyn's liquidation sale and an empty Circuit City in Newport Beach, CA among others, got Forever 21 some prime locations at bargain prices. It also got the chain on NYC real estate developers' radar. That's why when the Virgin Megastore's owners Related Companies and Vornado Realty Trust started to sniff a change in the winds of music and movie retail, they sagely closed the Broadway and 46th Street location in favor of leasing the cavernous space to Forever 21. Now, Forever 21 gets to stake a claim to 91,257 square feet "in the middle of everything."
Location, location
Its sleazy image a thing of the past, the tidied-up Times Square attracts plenty of foot traffic from both residents and tourists. With a hefty investment from the city to advertise NYC's attractions (part of Michael Bloomberg's goal to increase the number of annual visitors to 50 million), there's no doubt Forever 21's location in Times Square will have the revolving door twirling at top speed. And given that its neighbors Disney (DIS) and American Eagle (AEO) each already have a presence in Europe, the allure of a relatively inaccessible brand (F21 will open in the UK later this summer) will be that much more attractive to tourists from the continent.
Think globally, merchandise locally
The Times Square store is a whopper, but it's not Forever 21's largest (a California location boasts 184,234 square feet of space) and it's not the retailers first foray into tailoring the apparel assortment and its presentation to reflect local themes. While the Cerritos store channels the whimsical brights of Southern California , its New York cousin features grittier, yet no less show-stopping décor such as a graffiti tagged yellow taxi and store-within-store-within-neighborhood sections of the sales floor. The men's area, for example, has exposed brick and hanging scales in homage to the Meatpacking District. It's a far better way to reference NYC iconography than Urban Outfitters' (URBN) faux-storefront scheme which simply looks as though it's trying too hard to be urban-cool.
In addition, the Times Square flagship will stay open until 2am (the city never sleeps, and neither does F21), its product mix will change daily and the visual aspects will be constantly evolving as well. The only thing that remains to be seen is if the chain -- which is on track to approach $3 billion in sales this year -- will fall prey to the ills that plagued its now-defunct department store predecessors. Founder Don Chang continues to tout Forever 21 as a destination for the whole family and talks about the eventuality of adding housewares. It would do well to stick with fast fashion until it finesses this mega-store concept.
Image via Flickr user Quasipalm CC 2.0
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