Simon Property Group, one of Forever 21’s parent companies, reported $39 billion in profits last November, saying at the time that brick-and-mortar retail was a main driver and that e-commerce at its brands owned with ABG was down. The company doesn’t provide financial data for the brands it owns through its partnership with ABG. Park also declined to share revenue information about Forever 21. Brookfield sold its share of the brand for $63 million in 2021.
Fara Alexander, director of brand marketing and communications at retail tech company goTRG, said the increase of e-commerce returns is one reason brands like Forever 21 are better off looking to brick-and-mortar for growth opportunities.
“Among the biggest concerns for these brands is the cost of processing returns, particularly e-commerce returns,” Alexander said. “For stores like Forever 21, where the average item value is likely less than $50, retailers can spend almost the entire value of the item simply processing the return, not leaving much for them to recover on a potential resale.”