Forever 21 Acquisition Finalized, US Stores to Remain Open
Three companies finalized the acquisition of Forever 21, marketing company Authentic Brands Group announced earlier this week. The new ownership group — mall owners Simon Property Group and Brookfield Property Partners, with Authentic Brands — say they expect to keep Forever 21's 448 U.S. stores open. Court filings earlier this month put the price of the sale at $81 million. The new owners plan to continue to operate the fast-fashion retailer's Los Angeles headquarters and maintain its e-commerce business.
Total Retail's Take: The mall owners have a vested interest in turning around the fortunes of one of their biggest tenants. Here are the thoughts of Joe Jackman, CEO of Jackman Reinvents, the world’s first and foremost reinvention company, and author of "The Reinventionist Mindset: Learning to love change, and the human how of doing it brilliantly":
"Does Forever 21 have a real shot at redemption under new ownership? I’m a reinventionist, so my starting point is always ‘yes’ provided that a few fundamentals are true. First, is there a solid core idea there to work with? What made the brand great and special in the first place? Second, is there both the will and wherewithal to substantially reimagine how that idea can come to life in today’s context, which is vastly different than the circumstances that existed when the brand was founded in the mid-80s?
"On the first point, Forever 21 was born out of the American dream. Not only was it founded on the idea that current and exciting fashion could be accessible to everyone; deeper still, it was that anyone can be whatever they choose to be. The story of the Forever 21 brand is the story of its immigrant founders. Yes, it sold fast-fashion before that was commonplace. But what it was really selling was what customers wanted even more: a better version of themselves, closer to the aspirational picture in their minds than the reality of their pocketbook. That's a powerful and evergreen idea, arguably even more so today. Yet the manifestation of that idea became stale. Just one of many similar options, proving once again that interchangeability is NOT a successful strategy. Unfortunately, Forever 21 allowed itself to become yet another mall-based retailer of cheap and essentially disposable clothing, now a crowded broader landscape. Yet, that core idea still shines bright …
"On the second point — the will and wherewithal — I like what I see, namely a diverse ownership group with a common outcome: not only recreate brand value, but create a new, relevant and compelling reason to visit the mall. That and they have deep pockets.
"My conclusion: with thoughtful and continuous reinvention, Forever 21 has a real shot at lasting forever."
