Forever 21 Files for Bankruptcy Protection: What’s Next for the Retailer?
It’s been reported this week that Forever 21 has filed for Chapter 11 bankruptcy protection in the US.
The company plan to ‘exit most international locations in Asia and Europe’ but would continue to operate in Mexico and Latin America. With close to 350 stores worldwide, these closures will drastically reduce Forever 21’s international footprint.
Following the rise of online competitors and controversial fat-shaming claims, as well as several other factors, Forever 21 have faced ‘continued sluggish sales’. It’s been suggested that these cutbacks will result in a ‘much leaner US business’, with the Chapter 11 proceedings generating £224m in financing from existing lenders and £75m in new capital.
Whilst this significant change proceeds, Forever 21 are responsible for managing their own confidential data, their employees’ and clients’ information, and the transferring of critical international files back to the US. A magnanimous task, many have been left questioning exactly how this will be achieved.
To better explain Forever 21’s likely steps over the next few months, Ahmed Amin, the Founder of GuruSquad, shares his professional insight with CEO Today.
Over recent years, the need for data protection has become undeniable for all companies, no matter their size. It’s been found that 60% of mid-size companies go out of business within six months of a cyberattack, whilst larger organisations can experience catastrophic outcomes if their data is breached. Meanwhile, the rise of data protection regulations around the world have only enhanced this urgency, requiring all companies to implement concrete data protection measures.
Forever 21, as an international company with hundreds of stores, will have adhered with necessary guidelines, something that simply wouldn’t have been an option. This therefore means they would have devised sufficient protocols for securing their data, including the confidential information belonging to their employees and customers alike. Although, this process wouldn’t have been simple, numerous elements must be considered.
For example, for a company to faultlessly secure their data oversees, they must ensure that critical documents are replicated; contributing to a stringent disaster recovery plan, this prevents important information from becoming lost. Moreover, this allows key stakeholders to remain abreast of the company’s processes from their current location, with replicated data allowing for efficient sharing. Meanwhile, larger organisations with several data centres, much like Forever 21, typically benefit from investing in software that allows for real-time modification. With files being updated instantly, employees can view data that boasts the advantages of live-updates – nothing is delayed.
In an effort to protect their data, businesses also find themselves needing to educate their employees. Human risk is the biggest vulnerability in the chain of data protection; whether through ignorance or negligence, employees account for 54% of data breaches, a risk heightened following redundancies and job losses. In the wake of Forever 21’s filing for bankruptcy, it’s been announced that thousands of employees across Asia and Europe will find themselves unemployed, a saddening revelation for committed staff who call Forever 21 home. Subsequently, Forever 21’s bosses will be required to enact a disaster recovery plan which accounts for misplaced data. As such, they will replicate any critical information which hasn’t already been copied and distributed to the organisation’s core data centres.
Forever 21 bosses will also be required to transfer all of their international files back to the US, the business’ new sole residency. An enormous task that simply can’t be completed manually, this will necessitate the purchasing of a software which is capable of transferring information across bandwidths independently, notifying senior members of staff when these necessary transitions have been completed. We’ve developed GS RichCopy 360 Enterprise for this exact purpose; making data migration, file backup, file modification and disaster recovery efforts more efficient, this is the kind of programme that Forever 21 will most likely incorporate into their processes over coming months. Allowing users to copy open and locked files, copy long path names and NTFS permissions, block level copy (such being that the software detects only chunks of a large document that have been modified, as opposed to copying the entire file), GS RichCopy 360 fulfils real-time needs when companies like Forever 21 find themselves desperately needing updated figures and information. As the organisation considers which stores to keep open, accurate data is critical.
As Forever 21 refresh their servers across the US, they’ll also inevitably find themselves updating their security protocols. As they endeavour to create a more ‘streamlined’ business, this will no doubt include the sourcing of technologically advanced software; having fallen victim to the increasing popularity of their online competitors, I’d be incredibly surprised if they didn’t use this transition as an opportunity to further improve their own digital footprint. For example, we allow our users to copy all security needed information from old to new servers with no issues, in addition to facilitating the encryption of data during transit. As Forever 21 transfer client, employee and financial data, they’ll want to reassure these parties that such information will remain secure, invoking major security measures when crossing potentially untrusted areas.
Essentially, in an effort to positively develop their brand and oversee a seamless business reduction following their controversial bankruptcy announcement, Forever 21 will embark upon several unavoidable avenues. From handling their employee departures sensitively to ensuring that all of their security measures are impenetrable to providing their US stores with updated, accurate data, their main task will be to prevent data hiccups, in every possible way.