Fast-fashion apparel is riding out the recession in style. What’s the key to this sector’s success, and what can others learn from it?
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By Anne DiNardo
While Macy’s, Gap, Sears, Home Depot and Neiman Marcus started off the year announcing layoffs, store closings and capital expenditure cutbacks, H&M said it would open 225 stores in 2009. Forever 21 declared it was taking over the Virgin Megastore in Times Square and turning it into the retailer’s largest store ever, at 90,000 square feet. And Hot Topic and American Apparel reported healthy same-store sales increases.
Why are these fast-fashion retailers – those who appeal to the style-conscious shopper with trendy but inexpensive wares – thriving while so many other retailers are struggling to keep the doors open?
“The importance of buying something to make yourself feel good doesn’t change, even when the economy is bad,” says Darrick Borowski, creative director at Jordan Parnass Digital Architecture (Brooklyn, N.Y.).
Indeed, the National Retail Federation expects the changes in consumer behavior that started in 2008, such as trading down and cutting back, to continue throughout the year. “Shoppers will be seeking value in order to stretch their purchasing power,” says Rosalind Wells, NRF’s chief economist. That puts retailers such as H&M, Forever 21 or American Apparel in a pretty good place. But it’s not just about having a cheap price tag.
Today’s Budget-Conscious Shopper
“Price by itself is not important,” says James Nakaoka, president of J. T. Nakaoka Associates Architects (Los Angeles), which has worked with such brands as Rampage and Forever 21. “True value comes from quality and style and from no one else having that item.”
Nakaoka says Forever 21’s formula of selling a limited number of key items, so that shoppers won’t find the same thing everywhere, has made it stand out. “When women go into a store, it’s not fun for them to see things they already have,” he says. “That’s Kmart’s job.”
While shoppers today are becoming accustomed to sale after sale after sale sign, they also want fashionable products available more often than simply when the seasons change. “Today’s customer wants the ability to change her wardrobe eight times a year,” says Nakaoka. “So if Forever 21 stores look different every time she walks by, it attracts the shopper and makes the store a destination.”
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