Aditya Birla Fash­ion Down­sizes For­ever 21 due to Low Sales

Apparel - - Market Watch -

Faced with de­clin­ing sales, Aditya Birla Fash­ion and Retail (ABFRL), the li­censee of Amer­i­can fast fash­ion brand For­ever 21, is down­siz­ing stores and cut­ting costs. ABFRL re­ported a loss of R23 crore in fast fash­ion busi­ness dur­ing the quar­ter end­ing De­cem­ber 2017. Sales from the busi­ness de­clined 14 per cent from a year ear­lier to R114 crore (net sales value, or NSV). Losses widened be­cause For­ever 21 took a one-time in­ven­tory hit. NSV com­par­isons were also af­fected by changes in GST rates. ABFRL has re­duced the size of its old­est stores and will now fo­cus on open­ing new, but smaller stores. Most of th­ese are stores opened by the brand be­fore ABFRL ac­quired the li­cence for For­ever 21 from pre­vi­ous part­ners DLF Brands and Diana Retail. ABFRL did not spec­ify how small the new stores will be. The firm has been fo­cus­ing on cost cut­ting to help boost mar­gins, pri­mar­ily through rene­go­ti­at­ing rents and re­duc­ing store sizes wher­ever pos­si­ble, in­clud­ing for Pan­taloons, the firm’s de­part­men­tal store chain.

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