Forever 21

Summary

From a million dollar fast fashion retailer with presence worldwide to filing for bankruptcy and subsequently being acquired by a consortium of investors, the entrepreneurial story of Forever21 is unique. The fashion brand persists on staying ahead of innovation and providing styles and fit that customers love. Forever21 continues to operate E-commerce and four hundred and fifty- odd locations across the U.S. along with maintaining a strong brand DNA with consumers and within the fashion industry. In February 2020 Forever 21 came under new ownership made up of Simon Property Group, Brookfield Property Partners and Authentic Brands Group.

History

Do Won Chang and Jin Sook Chang immigrated to the United States from South Korea in 1981 with little money and no college education. Here, they worked as a hairdresser and a janitor, to make ends meet. Until Do Won observed that “the people who drove the nicest cars were all in the garment business.” Three years later, with $11,000 in savings, the couple opened a clothing store named ‘Fashion 21’ in LA, the predecessor to ‘Forever 21’, with a vision of retailing designs similar to those in South Korea to LA’s Korean American community. It wasn’t long before the fashion brand evolved into a destination for stylish apparel at affordable prices — the pioneers of “fast fashion.” The company generated an estimated $700,000 in its first year and the early success spurred further growth.

Initially ‘Fashion 21’ was popular with just LA’s Korean American community but the couple leveraged its success, opening stores every few months, and changing the name to ‘Forever 21’ to emphasize that it was “for anyone who wants to be trendy, fresh and young in spirit.” In 2015, sales peaked at estimated $4.4 billion. Per Business insider, “The Changs became one of America’s wealthiest couples, with a combined net worth reaching an estimated $5.9 billion in March 2015.” Their daughters, Esther and Linda, also joined the company. The success mantra was simple: sell on-trend apparel for low prices — fast. Jin Sook approved over four hundred designs a day, retailing trends as it happened, which eventually landed it in hot waters. Moreover, as the company grew bigger, its styles became “cookie-cutter” and retailers H&M and Zara posed stiff competition. Per Forbes, “the company scaled back on its rapid expansion and the Changs’ net worth was cut in half to $3.1 billion by 2018.”

The downfall of ‘Forever 21’ was just as swift as its ascent. Reportedly, fifty copyright violation lawsuits were placed against Forever 21 with Diane von Fürstenberg, Gwen Stefani, Anna Sui and Trovata among the designers who took action. Sales declined by 32 per cent in 2019, forcing the company to file for bankruptcy protection in September 2019. The retailer also announced it was ceasing operations in forty countries and focusing on core operations in the US and Latin America. Linda Chang, executive vice president for the company, reported in a company release that filing for Chapter 11 was “an important and necessary step to secure the future of our company, which will enable us to reorganise our business and reposition Forever 21.”

On February 2, 2020, Forever 21 inked a deal with a consortium of mall operators Simon Property Group and Brookfield Properties, and brand management firm Authentic Brands Group, to sell its assets for reported $81 million. Following the acquisition, ABG expanded ‘Forever 21’ in Latin America through licensing deals. During that time, it also relaunched its online store in 30 countries through the e-commerce company Global-e, targeting consumers in Canada, Asia Pacific, and Latin America. ABG and Simon each acquired 37.5 per cent of the company’s intellectual property and operating businesses, while Brook field acquired 25 per cent. SPARC, a joint venture between Simon Property Group and Authentic Brands Group, took over Forever 21’s management after the sale and appointed Daniel Kulle as Forever 21’s new CEO and immediately began expanding Forever 21 in Latin America via licensing deals That month, it also re-entered the UK and EU markets, opening online stores for British customers. Among other countries, in early 2020, it pulled out of Guam, South Africa and Lebanon.

In May 2021, Brookfield Property Partners sold its stake in Forever 21 for reported $63 million. After YM Inc. became the Canadian licensee for Forever 21 in June 2021, Hudson’s Bay announced a collaboration with Forever 21 in Canada. In August 2021, Forever 21 authorized Lasonic Limited Xusheng Co. Ltd. to manage its operations in China. Per Women’s Wear Daily, Forever 21 had also “reentered major e-commerce platforms like Vip.com and Pinduoduo.” It had 540 locations by December 2021 and, that month, partnered on product lines with JCPenney, owned by Authentic Brands Group. In December 2021, Forever 21 hired Virtual Brand Group to create a metaverse game for the company that allowed players to operate custom fashion stores.

However, the tides turned as ABG sued Bolt Financial in New York for failure to “deliver promised technology”, stating that Forever 21 had lost $150 million in online sales due to a botched rollout of a new e-commerce platform in 2021. ABG described Bolt’s software integration with Forever 21’s mobile app as “disastrous,” with multiple technical issues interfering in purchases. Bolt argued the claims were meritless. In early 2022, Forever 21 collaborated with Hervé Léger, Sports Illustrated, and Barbie. That summer, the company opened a new flagship store in India licensed by Aditya Birla Fashion and Retail. In June 2022, Poetic Brands was granted licensee rights to manufacture, market, and distribute the brand in the United Kingdom and Europe.

Vision

Fashion brand Forever 21’s vision is to create a dynamic and immersive shopping experience that appeals to fashion enthusiasts across all demographics. Since 1984, the brand has aimed to inspire its customers by offering a vibrant store environment where fashion lovers can explore the latest trends. By focusing on a broad audience that includes women, men, and children, Forever 21 ensures that everyone can find stylish, on-trend pieces that reflect their personality. The brand’s stores are designed to be more than just a place to shop; they are intended to be destinations where customers can experience the excitement of fashion, with fresh merchandise arriving daily to keep the shopping experience engaging and new.

At the heart of Forever 21’s vision is the commitment to delivering high-fashion looks at accessible prices. The fashion brand understands that staying stylish should not be a luxury, and it works tirelessly to provide the latest styles without compromising on pricing. This approach allows Forever 21 to appeal to a wide demographic of customers, from trend-conscious teens to savvy adults who want to stay on top of fashion without breaking the bank. By continuously updating its collections and offering a diverse range of apparel and accessories, the brand empowers its customers to experiment with their style, discover new trends, and express themselves through fashion.

The brand’s vision is also deeply connected to its ability to maintain a vibrant and ever-changing inventory. New arrivals are brought in daily, ensuring that there is always something fresh and exciting for customers to discover. This constant flow of merchandise not only keeps the store environment lively but also creates a sense of anticipation and urgency, encouraging frequent visits and a loyal customer base. Forever 21’s ability to adapt quickly to emerging trends and offer a wide variety of styles at great value has cemented its position as a go-to destination for fashion lovers who crave a unique and exhilarating shopping experience.

Mission Statement

Forever 21’s mission is rooted in making fashion accessible and affordable for everyone, a vision that has been at the core of the fashion brand since its inception. The company was founded by Do Won and Jin Sook Chang, who immigrated to the United States from South Korea in 1981. With little money and no formal education, they started their journey by working low-wage jobs. The duo saved $11,000 and opened ‘Fashion 21′ in Los Angeles, targeting the Korean American community with styles reminiscent of those in South Korea.

This small store quickly became the precursor to Forever 21, which evolved into a global brand known for its trendy, affordable apparel. The Changs’ mission was to offer fashion that resonated with a youthful, energetic spirit, which they achieved by constantly updating their inventory with the latest designs at competitive prices. Over the years, Forever 21 expanded beyond its initial demographic, appealing to a broader audience that craved fashionable clothing without breaking the bank. Their philosophy of “fast fashion” allowed the brand to stay ahead of trends and deliver new styles quickly to consumers.

The rapid expansion and changing retail landscape eventually led to a decline in sales, prompting the company to file for bankruptcy in 2019. Even with these setbacks, the brand’s commitment to offering affordable fashion has remained steadfast. Under new management, Forever 21 continues to adapt and innovate, focusing on revitalizing its presence in key markets and exploring new ventures, such as expanding into e-commerce and international licensing deals, while staying true to its mission of providing stylish, accessible clothing to a global audience.

Key Team

Winnie Park, CEO. Park, who reports to Sparc CEO Marc Miller, has decades of fashion and retail experience. Before Paper Source, she spent nine years at LVMH-owned luxury retailer DFS, where she launched its first global e-commerce site for fashion, beauty, watches, jewellery and spirits. Before that she led women’s merchandising at Levi Strauss-owned Dockers, and began her career at McKinsey & Company in fashion retail and consumer digital.

Products and Services

Forever 21, Inc., headquartered in Los Angeles, California is a fashion retailer of women’s, men’s and kids clothing and fashion accessories, making it a one-stop shop for trend-conscious individuals. With an emphasis on delivering the latest styles, Forever 21 constantly updates its inventory to reflect current fashion trends, ensuring that customers have access to fresh, on-trend pieces. From statement dresses and chic outerwear to versatile basics and unique accessories, the brand provides several options for those looking to elevate their wardrobe without compromising on style or budget.

In addition to its products, Forever 21 is committed to providing an exceptional shopping experience both in-store and online. The brand’s physical stores are designed to be vibrant and engaging spaces where customers can explore the latest collections in a visually appealing and organized environment. Meanwhile, its online platform offers a seamless and convenient shopping experience, complete with detailed product descriptions, styling suggestions, and customer reviews to assist shoppers in making informed decisions. With frequent sales, promotions, and a user-friendly return policy, Forever 21 ensures that its customers enjoy not only the latest fashion but also a satisfying and hassle-free shopping experience.

References

• Official website Forever21
• Forever 21 Inc. To Implement Global Restructuring Business Wire
• Facebook page of Forever21 Facebook
• Forever21 settles dispute with garment workers LA Times
• Twitter page of Forever21 Twitter
• Forever 21 files for bankruptcy bankok Post
• Instagram page of Forever21 instagram
• Forever 21 closing stores in bankruptcy Reuters
• Youtube page of Forever21 Youtube
• Forever 21 files defamation case LA Times
• LinkedIn page of Forever21 LinkedIn
• Former Forever 21 Billionaire Couple Slated To Sell Troubled Retailer
• Wikipedia page of Forever21 Wikipedia
• JCPenney partners with L.A. brand Forever 21 Biz Journals
• Forever 21 turns to retail veteran Winnie Park as CEO Retail Dive
• Forever 21 Forbes
• Forever21 bankruptcy NY Times
• Forever 21 to Acquire Retailer Gadzooks LA Times
• Forever21 NY Times
• Forever 21 opens 21st store in India Apparel Sources