Aditya Birla Fashion Downsizes Forever 21 due to Low Sales
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.