The fashion landscape seems to change at a moment’s notice. One minute, everything appears to be loving well. Then, suddenly, another fashion company files for bankruptcy and goes under. It happens just enough that it may make you wonder why it happens.
Depending on the company in question, we can learn different things. Learning such stuff is important because we can learn about the business mistakes made by various fashion companies. Here are just five takeaways that have taken place in recent years.
1. Fast fashion is losing its appeal
It was back in September 2019 when popular chain fashion brand Forever 21 announced that they were filing for bankruptcy. They closed up all their stores across Canada, Japan, the United States, and many more. Their online store also closed. For a fashion company that used to sell tons of clothes to young women, it came as a surprise that they failed after being successful for so long.
But the reality is that fast fashion outlets such as Forever 21 are failing because the idea of fast fashion is losing its appeal. Sustainable fashion has risen in recent years due to many people taking issue with fast fashion. This practice is said to have a negative effect on the environment because of chemical emissions and how wasteful it can become. With all things considered, it’s very likely that other fast fashion companies will file for bankruptcy in the future.
2. Consumers are losing Interest in certain styles
In May of 2020, J. Crew announced that they were filing for bankruptcy. As of now, their online store will remain open. They’ll also reopen J. Crew and Madewell stores once the coronavirus lockdown is over. Finally, exchanges, gift cards, and returns will continue to be honoured while the company undergoes bankruptcy restructuring.
Some have attributed J. Crew’s bankruptcy to the ongoing coronavirus pandemic, which has negatively impacted several businesses of different industries. But many more have blamed the decline of the America "preppy style" that used to be in fashion for the longest time. However, the style began to no longer be all that popular anymore. It also didn’t help that many customers felt that J. Crew’s clothing had declined in quality in recent years. But the biggest issue is that the prep style isn’t popular anymore—and J. Crew continued to cling onto it anyways despite this fact.
3. Certain clothing items are decreasing in popularity
Designer jean brand True Religion has had a troubled history in more recent years. The company filed for bankruptcy back in 2017, but managed to come up with a plan to change their vibe to appeal to customers. Unfortunately for True Religion however, this didn’t seem to fix their problems. As a result, True Religion filed for bankruptcy protection for the second time in a span of just three years.
It’s true that designer jeans were all the rage a few years ago. But like fashion styles change, so does the popularity of certain clothing items. Jeans have declined in popularity overall in favour of leggings and yoga pants— both of which are comfier options than jeans. True Religion tried to respond to this by creating a line of workout attire, but it was too late by then.
4. Fashion companies need to adjust to change
In November 2019, luxury department store Barneys New York filed for bankruptcy. Most of its stores have shuttered, and it wouldn’t be surprising if the few stores that are still open will end up closing sooner than later. But the initial announcement that Barneys New York had to file for chapter 11 bankruptcy shocked a lot of people.
The reason as for why this happened came down to one of the most popular reasons that exists— they couldn’t adapt to change. In the case of Barneys New York, retail has changed so much, but they didn’t adjust to said changes. One example of this was their refusal to carry a large range of sizes, choosing instead to only offer small sizes in their clothing. By refusing to adjust to changes when necessary, Barneys New York suffered until they were forced into filing for bankruptcy.
5. The coronavirus Pandemic will hurt companies
One of the more recent fashion companies to have to file for bankruptcy is Neiman Marcus. In early May 2020, the popular department store filed for bankruptcy. However, the company made it clear that they weren’t liquidating their assets anytime soon. Rather, they would temporarily close stores, and then reopen once the coronavirus pandemic began less of an issue. Still, it’s clear that things are currently not looking good for Neiman Marcus.
While this was already mentioned once before, the coronavirus pandemic has certainly hurt a ton of businesses. Some haven’t been hurt too much because they were able to change their business model to still serve customers during trying times. But in the case of Neiman Marcus, they weren’t able to do that in a way that would also benefit them. There’s no doubt that many more businesses will be forced to close down during the coronavirus pandemic, as well as in the aftermath of this unprecedented event.