SINGAPORE — A move in the United States to place fashion retailer Forever 21 under bankruptcy protection will not affect operations at its remaining Singapore outlet at 313@Somerset, a spokesperson said.

However, a number of industry experts and shoppers in Singapore have told TODAY that Forever 21 faces significant challenges in a fiercely competitive market, amid changing fashion preferences especially among youth.

In a brief statement on Monday (Sept 30), the retailer said: “Forever 21’s partners in Singapore, United Arab Emirates, India and the Philippines are not impacted by the US filing and it continues to be business as usual in those markets.”

The company announced that it had filed for bankruptcy protection late on Sunday, a move to "reorganise our business and reposition Forever 21", its executive vice president Linda Chang said.

In the US, firms that apply for bankruptcy protection can continue trading as they try to sort out their financial difficulties.

Forever 21 is seeking court permission to close up to 178 stores in the US to reduce costs. It has 815 stores in 57 countries.

At its high point, Forever 21 operated a total of four stores in Singapore, including at 313@Somerset, but the other stores closed progressively over the past couple of years. When TODAY visited the remaining two-storey outlet at 313@Somerset on Monday at 5pm, many shoppers were still browsing the merchandise.

Staff members told TODAY that the outlet has no plans to cease operations.

Industry experts believe that high rent and declining mall traffic has caused the fashion retailer to accumulate debt over the years.

Mr Samuel Tan, course chair in the retail management course at Temasek Polytechnic's School of Business, said: “As a high street fashion brand, the retailer is required to maintain a high level of inventory to provide the variety in order to maintain being customers’ top-of-the-mind brand. With a large number of branches worldwide, the brand is likely to have carried excessive stock.

“With intense competition, merchandise may not sell out before the next arrives, leading to a cycle of accumulated stock. Retailers are expected to make payments regardless of unsold stock.”

'GREW TOO FAST'

Mr James Fong, manager of Singapore Institute of Retail Studies, said: “Forever 21 has grown too big too fast that it ends up in financial trouble. It has invested heavily in conventional malls and with the sharp decline in mall traffic, that exacerbates the problems Forever 21 was facing.”

He added that the company also faced stiff competition from both online and offline fast-fashion retailers, and in trying to keep up, has resulted in a loss of identity.

“As Forever 21 grew bigger, it expanded its categories into menswear, children's wear, maternity wear, plus-size apparel, cosmetics and many other items as well. It ends up diluting what it originally stood for, losing focus on what brought it to where it is today.”

The experts also said that Forever 21 has not been able to keep up with the generational shift and cater to today’s youth.

Mr Lucas Tok, a lecturer in marketing competency and retail with Singapore Polytechnic’s School of Business, said: “Other players in the Singapore market have made a conscientious effort to remain relevant, like the kind of visuals and apparels that they offer, for example.”

He added that the rise of “athleisure” — a term to describe a current trend of athletic casual wear — has also caused Forever 21 to fall out of style.

“Forever 21 did not really tackle the change of scenery to get new consumers. Now, the current generation is going to e-commerce, which has so many options available. With e-commerce, the playing field has expanded and the brand has not changed its strategy to accommodate this change.”

He noted that popular fast-fashion brand H&M, on the other hand, has collaborated effectively with major designer brands such as Balmain and Alexander Wang.

Shoppers who spoke to TODAY said that Forever 21 has not been as up to date with current trends as other fast-fashion retailers.

Third-year Nanyang Technological University student Rosalind Ang, 25, said: “I used to be a big fan of Forever 21, like, I would visit every month to shop there with my friends. In the past two years, I realised their clothes became a lot less stylish.

“(But) it’s very hard to match up with online shops now because they can offer trendy clothes at such a low price.”

QUALITY 'NOT ON PAR'

Ms Teo Wen Xin, 21, a freshman at the Singapore University of Social Sciences, said: “I don’t like the clothes at Forever 21. They are not really as trendy now, compared to brands like Zara or H&M. They mostly offer T-shirts with printed words. Even if the clothes are trendy, the quality is not on par with other competitors.”

When asked how Singapore’s remaining Forever 21 outlet at 313@Somerset will be affected by these pressures, experts said that it depends on whether the corporate setup in local markets is equipped to tackle the issues facing the retailer.

Mr Tok said: “If, currently, each region does have a role for a dedicated buyer, then operations would not be affected. However, if the direction is constantly being made from the US and the regions simply follow their directions, then definitely they would need to reorganise their current processes.”

Some experts said that the decision to file for bankruptcy will not affect business in Singapore.

Mr Fong said: “I understand that Forever 21 is not ceasing operations. It's more of a consolidation of its operations and business, where it is closing non-profitable stores and keeping those that are still viable.

“As such, I suspect it is pretty much business as usual, although there will be reviews of product offerings and merchandise to get its business back on track.”