Why is Forever 21 leaving Peru? All that is known about his departure from the Peruvian market | Fashion | Forever 21 | Zara | H&M | Fast Fashion | Financial crisis | Offers | Discounts | Promotions | | ECONOMY

A hard blow for lovers method. Forever 21 confirmed that it is leaving Peru after 10 years of presence in the Peruvian market. The American chain would not be able to recover its pre-pandemic sales level, which contributed to its low penetration compared to brands such as Zara and H&M.

Deo 21 entered the Peruvian market in 2014 with its first store in the Real Plaza Salaverry shopping center, and shortly after opened the brand’s largest store in South America, at Jockey Plaza. Recently, the latter closed its establishment of 3,200 square meters in the busy shopping center Surco.

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Perú Retail confirms that the chain is liquidating its inventory with various promotions and discounts of up to 50% in its store in Jesus María. The liquidation, which could last several weeks, will mark the definitive closure of Forever 21 in the country.

Why is Forever 21 leaving Peru?

Before 21 years there was intense competition on the Peruvian market with giants such as Zara (Spain) and H&M (Sweden). Zara currently has 7 stores in Lima, while H&M has expanded its presence with 17 stores in Lima, Arequipa, Huancayo, Trujillo, Cusco and Cajamarca.

Despite recording high levels of sales upon entering the Peruvian market in 2014, Forever 21 was unable to maintain this trend. The brand was hit hard by the COVID-19 pandemic, the economic downturn, and intense competition from other stores and e-commerce platforms.

Before the pandemic, monthly sales per square meter at fast fashion stores were between $1,200 and $2,000 during periods of high demand. However, by 2023, these figures have been significantly reduced to a range between US$400 and US$420 per m².

Of the three big fast fashion brands in Peru, Forever 21 was the most affected. At the end of 2022, the brand failed to recover its pre-pandemic sales levels, unlike its competitors, which hastened its decision to close its stores in the country.

It also includes Colombia and Chile to close operations

In February of this year, Forever 21 announced that it was leaving Chile, closing the last three of the six stores it operated. Recently, he also left Colombia, starting with his flagship store in Bogotá with discounts of up to 70%. The other stores in Medellín and Bucaramanga are expected to close in the coming weeks.

With the closure of its stores in these three countries, Forever 21 will complete its withdrawal from South America.

The financial crisis affects Forever 21

In recent years, Forever 21 has had serious financial difficulties worldwide, which led to the filing of bankruptcy in the United States in 2019. The Authentic Brands Group (ABG) then acquired the company for $81 million.

Despite ABG’s efforts to revive the brand, the results did not meet expectations. In August last year, Shein, the Chinese online fashion giant, acquired a significant stake in Sparc Group, operator of Forever 21 owned by ABG.

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