Must Read: Forever 21 Considers Bankruptcy Filing, Investors Aren't Pleased With Farfetch's Evolving Business Model
Plus, Abercrombie & Fitch reports second-quarter losses.
These are the stories making headlines in fashion on Thursday.
Forever 21 considers bankruptcy filing
Forever 21 is reportedly preparing for a potential bankruptcy filing, according to sources close to the company. The retailer has been working with a team of advisers to help it restructure its debt and has been in talks for additional financing, but negotiations with possible lenders have gone nowhere. Now the shopping mall staple is considering securing a potential debtor-in-possession loan to take the company into Chapter 11. {Business of Fashion}
Investors aren't pleased with Farfetch's evolving business model
Farfetch announced disappointing profit performance earlier this month and said steep competition and heavy discounting were weighing on growth. And yet, the company has been hyperactive on M&A and its latest deal, the acquisition of New Guards Group, hints at a change of business model — from one that distributes brands online to one that creates them. In a piece for Business of Fashion, Luca Solca argues investors are not pleased with the switch and that the company should focus on executing the vision they sold. {Business of Fashion}
Abercrombie & Fitch reports second-quarter losses
Abercrombie & Fitch, impacted by some flagship closings, reported a second-quarter net loss of $31.1 million, compared to a loss of $3.9 billion, in the year prior. Going forward, the company expects third-quarter sales to be up about 1% and same-store sales to stay flat. {WWD}
Cheetos to host first-ever runway show
On Sept. 5, Cheetos will make its New York Fashion Week debut with a runway show made up of 21 looks inspired by fans on social media, who over the years have shared their love for the brand through their own interpretations of the orange-dusted snack. Each look will be put together by fashion influencers and stylists Luanna, Hungry Hipsters, Alexa Jade and J. Bolin, and the presentation will close with a piece by costume designer Ami Goodheart. The runway show is invite-only, but Cheetos will also host a style bar, open to the public on Sept. 6-7. {Fashionista inbox}
Male online shopping habits are shifting
Men are becoming more willing to purchase big-ticket fashion and luxury apparel online. Before, males mainly purchased footwear and accessories online. "The menswear consumer is constantly evolving, he is far more sophisticated and braver in his style and online purchases than he used to be," said Fiona Firth, buying director at Mr Porter in an interview with WWD. As a result, online fashion destinations are ramping up exclusive menswear drops and capsules with international luxury labels. {WWD}
The G7 Fashion Pact shows that trickle-down environmentalism is working
At the G7 summit in France, 32 fashion companies — including many luxury fashion labels, as well as Zara, Gap and H&M — committed to reducing carbon emissions and using more sustainable fabrics. Luxury brands have been leading the way in terms of becoming more environmentally responsible, but the pact proves ethical and sustainable clothes can't only be for the wealthy. The business model of mass-market brands is based on providing high-end style at low price points, and now the most coveted style is sustainability. This is why mainstream companies signed the pact. {Newsweek}
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