While other retailers continue to close doors during the economic downturn, Forever 21 continues to expand around the globe. The Los Angeles company has sales of more than $1 billion a year. There are plans for a 90,000 square feet store in Times Square next year. The store will have three levels and will be larger than the size of the Rose Bowl playing field. The retailer also plans to build a mall adjacent to Inchon International Airport in South Korea.

By focusing on the trend-hungry, cost-conscious young woman, Forever 21 has built a $1.8-billion business. In the future, Forever 21 hopes to be a comprehensive fashion department store chain, selling clothes and accessories for teens, women, men and children.

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Retailers such Wal-mart and T.J. Maxx saw an improvement in sales in April and May with the help of tax rebate checks. Wal-Mart saw same-store sales rise 3.9% while analysts only predicted a 1.6% rise. T.J Maxx same-store sales increased 2% while analysts predicted a 1.8% sales increase.

Other retailers did not do so well. For instance J.C. Penney same-store sales fell 4.4% while luxury retailer Saks Inc. saw same-store sales fall 8.7%.

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Saks fifth avenue has beein going through a retail rejuvenation that launched two years ago. The retailer now offers a merchandise mix with a greater range in price and style. Their three lines, “Park Avenue” classic, “Uptown” modern and “Soho” contemporary are aimed at a variety of ages and tastes. They can now reach a broad consumer base from the ultra-wealthy to the entry-level rich.

Keeping Current Customers Happy While Attracting New Ones

Though wealthier consumers are less affected with rising costs, they are still looking for deals. For the entry-level rich who can’t afford the top of the line yet, the lower price points will keep them fashionable without being too much of a burden on their wallets. 

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Cutting back on marketing expenses is one tactic retail giant Gap used to help lift earnings up to 40%. Ad spending dropped almost 18% from the year-earlier with a $21 million reduction due to absence of TV spots. While earnings improved, sales showed signs of trouble amid an economic slowdown affecting the whole retail industry. Gap North America sales dropped 7% for the quarter to $976 million while Old Navy’s sales decreased 18% to $1.2 billion. At Banana Republic, sales decreased 4% to $538 million. How can a retailer such as Gap increase sales?

Consumer Desirable Goods

Cost controls can only go so far. In the end, retailers need to offer consumer’s attractive products to achieve sales growth. Does Gap have the clothes consumers want?

Customer Service

During an economic slowdown, retailers such as Gap need to focus on customer service. Store managers should train their employees to sell, sell, & sell. Customers should not leave the store with only one item in their bag. 

While many retailers are cutting back on store openings and closing down underperforming stores, Steve & Barry’s is on an expansion roll. How do they do it?
No Advertising
Steve & Barry’s does not advertise. They also don’t sell anything through the internet or catalog.

Keep costs and price tags low while maintaining quality
Steve & Barry’s started an $8.98 price tag promotion during the holidays and has continued on with the promotion because of the slow economy.

Keep corporate expenses at a bare minimum
Steve & Barry’s says office chairs cost about $20 each at their corporate headquarters

For more information, read Cheap and chic fuels Steve & Barry.