Just north of Papua New Guinea and a three-hour flight south of Tokyo, lies a tropical US territory called Guam. A remote, yet cosmopolitan shoppers’ paradise for Japanese and South Korean tourists who flock there to relax in the beachside luxury hotels, buy American goods at retail chains like Gap and Macy’s, and chow down at the island’s Olive Garden and KFC.
There are about 160,000 inhabitants on Guam where, according to the US Bureau of Labor and Statistics, the average hourly salary is $17.30, 30 percent lower than the average hourly wage on the United States mainland. Wages are low, yet hefty shipping costs and the lack of market competition have driven the cost of living to outrageous heights: a gallon of milk has soared to $8.50 and an average loaf of bread is about $5. It’s no surprise that locals avoid high-end stores like Gucci and Prada and other vanguard boutiques that dot the streets of Tumon, Guam’s version of Waikiki Beach. For years, brick and mortar stores like Nine West, BCBG, and Forever 21 were an island girl’s go-to shops for the many fiestas and local galas there. But over the last five years, the first two closed and the latter just filed for bankruptcy. Disappointment is running high on Guam; as in any small community, showing up to a party in the same dress as someone else is a reality island women know all too well.
Across the United States, a decrease in foot traffic has led to the bankruptcy of established high-street department stores like Barneys New York and more accessible ones like Filene’s. The phenomenon has also left malls and roadside retail spaces jockeying for tenants or abandoned. New fast-fashion trends are emerging as players like boohoo.com and its subsidiary PrettyLittleThing have picked up steam, luring millennials and post-millennials with their racy clubbing outfits, some priced as low as a Red Bull. But the looming bankruptcy of Forever 21 leaves a generation of women who have grown up with it wondering where they will buy decent fashion-forward clothes.
“We’re left with no options. Many high-end retailers are closing or have closed as well. And while a few locally-owned accessible apparel boutiques have opened to fill the void, the options are limited here,” said Guam resident Dee Perez-Damian, a marketing executive, who worked as a director of marketing in luxury retail for five years.
Forever 21 was a pioneer and democratized fashion for consumers of all budgets, carrying everything from hot party clothes to the perfect little black dress. Founded in 1984 in Los Angeles, it benefited, together with Zara and H&M, from the financial crisis of 2007-2008, and exploded all over the world.
According to Euromonitor, the apparel industry has been at war on two fronts: in terms of price and how fast they can bring trends to market. Regarding the latter, market experts suspect Inditex, the owner of Zara and H&M, are better poised to win that fight, as their companies include a variety of brands like Massimo Dutti and COS, as well as others that appeal to cultured, higher-end consumers looking for accessible items that are crafted with quality materials.
“As consumers’ expectations for fast-fashion increased, Forever 21 had trouble keeping up with the constant demand for new styles. As a result, the brand struggled with excess inventory, which had to be heavily discounted for a significant loss of profit,” said Euromonitor analysts Ayako Homma and Benjamin Schneider in a report published at the end of August.
Euromonitor added that competition in apparel and footwear has intensified, as major players are embattled in a fierce fight to bring products to market faster and at lower cost than their peers. “The ongoing decline in unit prices that has characterized the fashion industry for over 10 years has hampered the profitability of even the most efficient and agile players,” Euromonitor added.
Forever 21 is not the only fast-fashion retailer that has struggled since 2015. Forever 21’s UK peer Topshop announced the closure of nearly a dozen US stores in 2019, and has already closed 200 stores in the UK over the last three years. Euromonitor said growth at H&M and Zara has also dimmed, due to online competition.
Aside from a decrease in foot traffic, online retailers, as well as brick and mortar ones, face huge headwinds as governments and society, in general, put pressure on apparel makers in the US and Europe, to transition to a sustainable business model.
Major players like Inditex pledged this summer to render Zara’s clothes completely sustainable by 2025. The impact of transitioning to a sustainable supply chain on profits remains to be seen. The future of fashion at democratized prices is also unclear. At the very least, less options may eventually encourage consumers to shop more consciously and reuse and recycle what they already have.
Photo by Camille Denight