Forever 21 is partnering with mall developer GGP Inc. to roll out its Riley Rose beauty boutique concept, which will include accessories, cosmetics and home goods in an experiential setting aimed at younger, millennial-age shoppers, the fast-fashion retailer announced Friday in a press release.
Riley Rose stores will be featured in 13 “top-tier” GGP regional shopping centers across the U.S., the companies said. The retailer is slated to open 10 stores this year and three more in 2018.
GGP owns and operates 127 retail properties in 40 states and is reportedly exploring strategic alternatives, including a possible sale, according to a recent report from Crain’s Chicago Business.
Stores that are faltering these days need to do more than lament pressures from e-commerce, Simon Property Group CEO David Simon said recently, but he added that malls must do their part too. “I'm hopeful that they're going to reinvest in their stores, improve their inventory mix and service their customer better,” he said. “And, by the way, we've got to have the same pressure on us to do that. So, it's a two-way street.”
Earlier this month, GGP CEO Sandeep Lakhmi Mathrani outlined ways that his company is doing just that, by introducing businesses beyond the traditional mall specialty retail locations, including grocery stores, cinemas, innovative entertainment venues and fitness centers, among others. The addition of Forever 21’s Riley Rose boutique concept, which aims to take advantage of the strength in the beauty sector, fits with that diversification strategy, Mathrani said in a statement Friday.
“Customers have come to expect lifestyle options at their regional shopping centers,” he said. “Millennials have embraced the Forever 21 brand, and GGP is thrilled with the introduction of Riley Rose. We know our shoppers will enjoy it.”
The fast-fashion retailer already sells some beauty products including makeup, skin care, hair care, nails, tools and K-Beauty (including sheet masks) from other brands, as well as its own private-label line. After the initial round of stores are opened, Forever21 reportedly will assess their performance and potentially open more locations next year, according to an earlier report by Women's Wear Daily.
In a May 1 conference call, Mathrani told analysts that “there is no sacred cow” when it comes to extracting value from the company, according to a transcript from Seeking Alpha.
“We're evaluating all alternatives, and we will pick a path in the near term by looking at assets on both ends of the quality spectrum,” he said. “We could sell assets and dividend cash. We could sell asset and buy back our shares. We will get value to our shareholders. The break-up value is more than the current market capitalization. The business is strong. We will pick a path soon.”
With that, Mathrani didn’t take a sale off the table, though he also noted that it’s early days, and the company hasn't hired an investment bank to advise it on its strategic alternatives. Malls continue to be under pressure as specialty retailers struggle, with a high number filing for bankruptcy in recent months, including Wet Seal, The Limited, Payless, American Apparel and Rue21.