November 19,2015-
The Hanford Forever 21 store, one of the 4 large anchors at the Hanford Mall is for sale, currently owned by the LA-based teen clothier. The 80,000sf property is for sale for $4 million according to Matt Kircher of DTZ Retail of Sacramento. Forever 21 acquired the building when Gottschalks went through bankruptcy in 2009.
Only days ago Forever 21 told its employees at the former Gottschalks, turned Forever 21 in San Luis Obispo, that they would close that 120,000sf store as of January 6. Some 72 employees will be out of a job.
Industry sources say the teen retailer plans to vacate the Hanford store, or most of it, as part of a sale, as it is more space than they need. In most markets the trendy clothing store formats are closer to 24,000sf with many of them smaller than that.They acquired the larger stores when Gottschalks closed in 2009 paying a reported $17.4 million for 13 former department stores across the state including Hanford,Fresno and Bakersfield.
Now they may be on a downsizing mission at some of the former Gottschalks locations like, SLO, Hanford and Yuba City,reportedly.
The largest of the big stores was in Riverside, acquired in 2009 and closed in 2013.It was 184,000sf. In Fresno the big three-story Forever 21 was consolidated back to 2 floors late last year. This year Forever 21 closed one of two large stores in Downtown San Francisco as competition in the teen retail sector is fierce.
Forever 21 corporate office did not return calls for comment.
Given the economics F21 may be happy with a smaller brick and mortar footprint as clothing sales trend to more online sites. After all ,nothing is forever. But they may not abandon their market in either Hanford or San Luis Obispo where they could open a smaller store rather than just leave.
Forever 21 Rethinks Its Love of Giant Stores
Late this summer the Wall Street Journal, with the above headline reported “Fast-growing teen retailer Forever 21 Inc. is sounding out landlords about downsizing some of its biggest stores, according to people familiar with the matter.”
The story continues.
“The company is also in talks with Wells Fargo & Co. and TPG to obtain a $150 million loan to bolster its balance sheet, some of these people said. The financing is a rare instance of the closely held company turning to outside investors, the people continued.
Forever 21, which discloses little about its finances, has predicted that sales would rise 10% this year to $4.7 billion. But people familiar with the company say its sales and profit have tapered off after years of strong growth. The company has stumbled by expanding into cavernous stores that it had trouble filling productively, they said.
Brian Tunick, an analyst with RBC Capital Markets, estimates that excluding newly opened or closed stores Forever 21’s sales have been running negative for the past 12 months.”