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Forever 21 to Open Larger Concept in L.A.

Fast-fashion giant Forever 21 is planning an expanded format in 2009.

Fast-fashion chain Forever 21 plans to launch a prototype in California this year that will double its average store size.

The privately held retailer aims to open an estimated 80,000-square-foot store at Los Cerritos Center, a Macerich-owned mall near Los Angeles, in late 2009. The space was acquired as a result of the liquidation of Hayward, Calif.-based retailer Mervyns.


The concept will feature a brightly lit floor space with women’s and men’s apparel divided by look — vintage, casual or avant-garde, for example — surrounded by accessory walls along the indoor perimeter.

“It’s a way to use our fast-fashion heritage to offer more categories for more customers,” said senior vice president Larry Meyer. “We’re bringing in larger sizes, a more enhanced shoe collection, lingerie and more categories.”

Forever 21 acquired 15 Mervyns leases in a joint bid with Kohl’s, which took over 31 stores, for $6.25 million in a court auction in December.

There is risk in opening a slew of a new-format locations, especially during the recession. But Meyer said the new concept would help the chain appeal to consumers older than 24, a demographic that represents more than one-third of Forever 21’s overall customer base, with 45 percent falling between 18 and 24 years old and the remaining 20 percent under 18.

The apparel retailer’s revenue has grown from $180 million eight years ago to roughly $1.65 billion last year, with about $2 billion projected for 2009, Meyer said.

 

“You see 15- and 18-year-olds shopping right next to 35-year-olds and none of them feel uncomfortable,” said Los Angeles architect Jas Nakaoka, who has designed Forever 21 stores for more than 10 years and handled the prototype. “This is a new thing.”

The move is part of Forever 21’s shift toward department-store-size units. Existing stores range from a 1,700-square-foot, accessories-only door called For Love 21 in Glendale Galleria mall to a 90,000-square-foot store that is to open in 2010 at 1540 Broadway in New York’s Times Square.

The typical Forever 21 is now less than 40,000 square feet, but has grown in this decade. In 2000, the average Forever 21 store was about 6,000 square feet, and in 2006 the Los Angeles-based apparel company opened its largest store in Pasadena, Calif., a 40,000- square-foot site once home to Saks Fifth Avenue.

Nakaoka said creating the larger concept has been a challenge.

“It was hard with 40,000 square feet, so how do you do it with 80,000?” Nakaoka said. “We have to make it a new store, a non-department style store in a department store-sized space. We fight about it; it hasn’t been easy. But it will be just right. Nobody has ever done this before.”

Executives said a department store-style concept has been part of owner Don Chang’s plans for years, and will drive growth. The company has not yet identified other sites for the makeover.

“The costs are quite significant,” Meyer said. “That’s why it’s important that we get Cerritos right first before moving on to other locations.”

The chain, which has about 430 mall stores, first tried to acquire Mervyns real estate in 2004, when Target Corp. sold the now-bankrupt value retailer for $1.2 billion to an investment group that included Sun Capital Partners Inc. and Cerberus Capital Management LP.

Forever 21 is taking space at malls in Arizona, Utah, New Mexico, Texas and California, and has expanded overseas, opening stores in China, Thailand and South Korea last year. It plans to launch in Japan’s Harajuku district on April 29.