The rocket ship that fast-fashion retailers have ridden over the past few years appears to be running out of fuel.
EZ Worldwide Express, a shipping firm that handled clothing deliveries for Forever 21, has cut ties with the low-price retail chain because business tapered so dramatically that it was no longer profitable to work with them, according to a report in The Wall Street Journal.
That report, citing a court document filed in May, said EZ Worldwide Express’ weekly sales to the retailer have ranged from $352,483 to $428,764. Those figures were “drastically lower than the same five-week period last year, where weekly sales ranged from $629,817 to $780,730,” The Journal quoted the document as saying.
EZ Worldwide filed for Chapter 11 bankruptcy protection in January. Forever 21 accounted for nearly half its annual revenue of $25 million to $30 million, according to The Journal.
A spokeswoman for Forever 21, which is privately held and does not release financial results, did not immediately respond to request for comment. The chain, which operates roughly 730 stores, has been shutting down some of its large locations.
The Journal report is the latest sign that fast-fashion, a category that stole market share from traditional retailers and caused many shoppers to expect constantly changing, in-season products, is starting to slow. During the second quarter, sales at H&M rose just 5 percent in local currencies, despite the retailer operating 438 additional stores at the end of May compared to the prior year.
Due to this slowness, which analysts said could partly be the result of unseasonably cool weather, the retailer is grappling with excess inventories that could force it into running unplanned promotions during the current three-month period.
Inditex, which operates the popular Zara chain, continues to perform well, with both its sales and profits climbing in the most recently ended quarter.