Retail stores targeting teens were strong players in the retail market for many years. And no time was greater for those companies than the start of the millennium. Shopping districts across the country seemed filled with the stylish logos common to teen retailers, and many stores grew to become mainstays in pop culture.
The momentum has slowed a bit for many teen retailers recently, however. And some stores that enjoyed a good position in the market just a few years ago have recently been forced into bankruptcy.
Aeropostale
One of the latest retailers to fall victim to teen retailers’ downturn is Aeropostale. Analysts say the apparel store struggled to stay afloat as its core customers’ interests underwent a dramatic change. More specifically, many of the store’s customers became much more interested in purchasing the latest gadgets than current fashion trends.
One consulting firm CEO explains that Aeropostale was not the only teen apparel retailer to struggle in the changing market. However, the sales decline for Aeropostale never seemed to stop. Nor did the company experience a rebound when competitors’ sales began a return to normal.
Pacific Sunwear
The problems for Pacific Sunwear have a lot more to do with pricing problems than anything else. The clothes offered by the company were indistinguishable from offerings from several other countries. In the end, the company was unable to find another attraction to hold the attention of its young customer base.
Another problem for the companies is that foot traffic in the malls that are home to many stores has declined for years. The rise of online shopping is the cause of much of the decline.
A stat published by U.S. News shows the size of this decline and provides insight into how this problem has affected the industry. From 2010 to 2013, mall visitors over the holiday season plunged from 35 billion to just over 17 billion.
Forever 21
Forever 21 was founded by an immigrant family from Korea three decades ago. The company flourished in the 2000s but has found the going a bit tougher in recent years. The mass tort attorneys familiar with the company’s problems say Forever 21 suffered the same fate as several other retailers targeting teen buyers: Decreasing foot traffic made it difficult for the company to sustain itself.
One analyst explains that Forever 21 lost a substantial percentage of its sales to newer online retailers. A recent company sale will keep Forever 21 doors open for the foreseeable future.
The three companies that now own Forever 21 are the Authentic Brands Group, Brookfield Property Company, and Simon Property Group. The price tag for the new owners was $81 million.
Quicksilver
Quicksilver Inc. is a California-based company that made its name selling skatewear and surfwear to teenage customers. The company concept first came to life in 1976 when original owners Jeff Hackman and Bob McKnight met in a Newport Beach garage.
Thirty years later, the then publicly-traded company enjoyed annual revenue of $2.43 billion. Slumping sales caused company revenue to fall to a little more than half of its high mark by 2015.
The company filed bankruptcy in 2016 and restructured $800 million in debt under its new private ownership. The new owners changed the company name to Boatriders and now hope a name change and set of new initiatives are enough to return the company to its prior prominence.
Bottom Line
The recent sales slump for many companies operating in the teen retail sector has reduced profits and threatened company existence. Much of the problem was traced back to reduced foot traffic caused by the booming e-commerce sector. The losses were so great that many retailers found they had no other option but to file for bankruptcy or sell the business entirely.
The post 4 Beloved Teen Retailers That Declared Bankruptcy appeared first on Home Business Magazine.
source https://homebusinessmag.com/businesses/business-spotlights/4-beloved-teen-retailers-declared-bankruptcy/
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