The Rise And Fall Of Forever 21

The Rise And Fall Of Forever 21


Forever 21 was once
among America’s fastest-growing
fast-fashion retailers. It transformed its
once penniless founders into billionaires, established itself as
a powerhouse in the fast-fashion world, and, at its peak, made
$4.4 billion in revenue. But the once flush
company is now preparing to file
for bankruptcy. So, what happened? Back in the day, Forever 21 embodied the
American dream. In 1981, Jin Sook and Do
Won “Don” Chang moved to Los Angeles from
South Korea with no money, no
college degrees, and speaking little English. To make ends meet, Jin Sook
worked as a hairdresser while Don worked
as a janitor, pumped gas, and
served coffee. Until he noticed that
“the people who drove the nicest cars were all
in the garment business.” So three years later,
with $11,000 in savings, the Changs opened a
900-square-foot clothing store called
Fashion 21. The couple took advantage
of wholesale closeouts to buy merchandise from
manufacturers at a discount. Their system worked. The store made $700,000
in sales its first year. Fashion 21 was initially
only popular with LA’s Korean
American community. But the Changs
leveraged their success, opening new stores
every six months, which broadened the
company’s customer base at the same time. They also changed the
name to Forever 21 to emphasize the idea
that it was “for anyone who
wants to be trendy, fresh and young in spirit.” The company’s key to
success was simple: cultivate a huge following
by selling trendy clothing
for low prices. While this is something
that today’s consumers pretty much expect, Forever 21 was one
of the first to do it. And they were the fastest. Jin Sook was eventually
approving over 400 designs a day. Which meant the
company could sell trends as they were happening. Even if some of those designs
landed Forever 21 in trouble. But while other brands
and designers might not have been
Forever 21’s biggest fans, customers couldn’t
get enough of their affordable styles. As a result, Forever 21
became one of the largest tenants
of American malls, with 480 locations
nationwide. And by 2015, business
was booming. Forever 21’s sales peaked, with $4.4 billion in
global sales that year. As for the Changs? They became one of
America’s wealthiest couples, with a combined net
worth reaching an estimated $5.9 billion
in March 2015. Forever 21’s goal
was to become an $8 billion company
by 2017 and open 600 new
stores in three years. But the company’s
aggressive expansion would also lead to
its downfall. Part of what made Forever 21
popular in the first place was its fast-fashion model. Even though its products
were always mass-produced, they still felt unique
because its stores only sold select styles
for a limited time. However, as the company
focused on growing bigger, its styles became more
“cookie-cutter.” As a result,
Forever 21 started to lose touch with
its core customers, while competitors like
H&M and Zara rose. No longer the trendsetter, Forever 21 became
the butt of the joke. It’s also no longer the
fastest in the game. Internet brands like
Fashion Nova churn out celebrity- and
influencer-inspired styles at a rapid-fire pace. And as e-commerce
has continued to boom, traditional retailers
like Forever 21 have struggled to adapt to changing consumer
behaviors. According to a March
2019 survey, millennials make 60% of
their purchases online and overall prefer
online shopping over going to a
physical store. Yet, Forever 21 continued
opening new stores as recently as 2016, even expanding
existing stores to take over multiple
floors with mens, childrens, and
home-goods sections. Which could help explain
why Forever 21’s sales are estimated to
have dropped by 20% to 25% in 2018. On top of that, the Changs, who still own the company, have lost more than
$4 billion from their personal
net worths. The company overall is
now $500 million in debt and considering
filing for bankruptcy. Forever 21 has already
started downsizing its stores. And as one of the largest
tenants of America’s malls, a widespread shutdown
of Forever 21 could exacerbate what’s
already being referred to as the “retail apocalypse,” which has already closed
more than 15,000 retailers across the US and could shut down
75,000 more, according to investment
firm UBS. But bankruptcy
doesn’t always mean the end for
a company. In fact, it could give
Forever 21 time to restructure
and bounce back. The company could
shut down its least profitable stores and try rebranding itself. But in an age of cheap
internet boutiques and fast-fashion empires,
this might not be enough. So it turns out Forever 21 might not be forever
after all.

25 Comments

  1. Codswallop says:

    No one can stay forever 21

  2. Ana Banana says:

    I think forever 21 would do great in asia where people still physically go to stores and sizes are perfect for asians. it's literally a dog eat dog world out there. sad. food and clothes are so common, you would have to be super extra to win. competition 😧

  3. : D says:

    Forever 21 is failing because they’re turning 22

  4. Meatloaf cat says:

    That's only store which clothes that fit me well, I am so sad😭😢😢😭 Where do I go for clothes as a tiny beautiful girl now?

  5. Stars Withlove says:

    The Rise And Fall Of Apple

  6. Dixie Normous says:

    Lol the last sentence was dramatic af “forever 21 might be not forever at all” 🤣

  7. Hettie Petra says:

    I feel bad for the Changs, they are back to nothing 😞

  8. Mya the Mercurian says:

    I feel like thrifting will become a trend in a few years. Or just that it will be bigger than it already is, because I have switched over to sustainable shopping.

  9. Bichr Salhi says:

    watch this video at a 1.5 speed or else you'll fall asleep

  10. chelsea bts says:

    That sucks because I was looking forward to shopping there when I was older

  11. Grid Life says:

    They just got greedy. Thats why they going bankrupt. Why open up so many new stores when you have a lot already? Just focus on the damn stores you already have and try to improve them.

  12. Ken Yup says:

    They have withdrawn from China recently and I knew them still have bunch of stores in Japan

  13. Paola Garcia says:

    bruh

  14. Layla Lee says:

    I still remembered the day i only excited for this brand before zara and h&m.

  15. NOT EVEN GOD says:

    Ew it's owned by Asians

  16. Anna Adebawo says:

    They are not doing well because ……
    1. Forgot about social media …..easiest way of mass marketing.
    2. Teens want to dress classy and sexy like older women so they shop at Zara , Fashion nova, boohoo etc.
    3. Can’t keep up with style ..women are not dressing sexy by tube tops, bootie shorts anymore …they wear bodycon dresses and bodysuits.

    Thats why Abercrombie and Hollister isn’t as popular…nobody wants to be wearing logo tees and shirts unless it says balmain or balenciaga

  17. lazymusician10 says:

    My little sister loves this store, she's gonna be mad if they close the location where we live.
    I'm glad I just shop at thrift stores, I'm not really one for name brand things unless something interests me. I'm a cheapskate, I hit up that clearance rack all the time or a really good thrift store.

  18. linda says:

    Forever 21 trying be like fashion nova and not everyone wants to buy clothes like fashion nova. 2015 was a good year of clothing for forever 21 😭

  19. Camila Ramos says:

    im glad this fast fashion company is closing its horrible for the environment

  20. Halfling says:

    Crappy quality clothing at too high a price.

  21. brielle ricker says:

    i like online shopping but nothing beats spending a day going store to store jus getting everything u want

  22. Teru Kage says:

    I don't know if it was a conscious choice to sound like Forever 21's demographic, but nearly all of Irene's sentences used upspeak (rising intonation that makes everything sound like a question). Not the best way to make a presentation.

  23. cj222100 says:

    I don't really shop there, most of the styles are too young for me & I avoid fast fashion, but I recently went to one because I fell on my way to work, ripped my pants, & needed something real quick, & that's what was nearby. And it really was very different from how I remembered it from the early & mid 00s-very cluttered, messy, odd looking styles (though that's a matter of personal opinion), & the quality seemed worse. Ofc, this could have just been a matter of that location.

  24. MANISH ANAND says:

    Short Crispy& self explanatory.

  25. I. Daniela Viteri says:

    and what about the cheap labor they used

  26. Little Reuby says:

    They should pivot to something else… Dropshippers ended them

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