How Forever 21 went from a fast-fashion powerhouse to a brand reportedly eyeing bankruptcy and a troublesome future
- Forever 21, once one of the world's leading clothing retailers, has fallen on hard times.
- The company was founded in 1984 and pulled in $700,000 in sales in its first year. Today there are over 800 Forever 21 stores worldwide.
- Founders Jin Sook and Do Won "Don" Chang had a combined net worth of $5.9 billion at the company's peak in 2015, Forbes reported. They were no longer billionaires as of July, according to Forbes' estimates.
- Forever 21 is evaluating a restructuring plan and is considering filing for bankruptcy, Bloomberg reported in August.
- On Thursday, Forever 21 denied to Business Insider that it had imminent plans for bankruptcy, despite reports. "Our stores are open and it is our intention to continue to operate the vast majority of U.S. stores, as well as a smaller amount of international stores, providing customers with great service and the curated assortment of merchandise that they love and expect from Forever 21. Please visit our store locator to find the most up to date store list," the company said in a statement.
- Here is the complete story of Forever 21, from its quick rise to become a top teen retailer to its slowdown and uncertain future.
- Visit Business Insider's homepage for more stories.
But before its struggles, Forever 21 seemed unstoppable.
The company was founded by husband-and-wife duo Jin Sook and Do Won "Don" Chang after they emigrated from South Korea to Los Angeles in 1981. The pair opened their first store, then called Fashion 21, in 1984 and pulled in $700,000 worth of sales in the first year.The retailer thrived through the early 2000s, eventually peaking in 2015 when its founders were worth a record high of $5.9 billion combined, Forbes reported.
Today, reports of messy stores and empty displays combined with store closures in major markets have put the company behind some of its fast-fashion competitors. Forbes estimates that the cofounders are no longer billionaires.On Thursday, Forever 21 denied to Business Insider that it had imminent plans for bankruptcy, despite reports."Our stores are open and it is our intention to continue to operate the vast majority of U.S. stores, as well as a smaller amount of international stores, providing customers with great service and the curated assortment of merchandise that they love and expect from Forever 21. Please visit our store locator to find the most up to date store list," the company said in a statement on Thursday.Advertisement
Here's the story of the company, from its quick rise to global prominence to its slow downfall into uncertainty.
The story of Forever 21 began with a dream. Husband and wife Jin Sook and Do Won "Don" Chang emigrated from South Korea to America with ambitions to start a business.
After working as a janitor and coffee server for three years, Don had a realization. "I noticed the people who drove the nicest cars were all in the garment business," Don told The Los Angeles Times in a 2010 interview.Advertisement
In 1984, the couple opened a 900-square-foot clothing store in Los Angeles called Fashion 21, the predecessor to Forever 21.
The business took off. In its first year, the retailer pulled in $700,000 in sales. This initial success spurred further growth, and the couple began to open new stores every six months.Advertisement
The company eventually changed its name to Forever 21, and in 1989 it opened its first mall store in Panorama City, California.
In 1995 the company opened its first store outside California, in the Mall of the Americas in Miami, Florida. In 2001, the first international store opened in Canada.Advertisement
In 2003, Forever 21 launched its website ...
... and in 2006, it launched its men's line.Advertisement
Forever 21 was soaring by 2010. There were 500 stores across the country, and the Changs had made it to No. 79 on the year’s Forbes 400 list of the richest Americans.
It wasn't long before Forever 21 made itself known as a destination for trendy clothes at affordable prices, a specialty that has been dubbed "fast fashion."Advertisement
The company peaked in 2015, when it was bringing in around $4.4 billion in sales from over 600 stores and the founders had a combined net worth of $5.9 billion.
But things would soon start going downhill from there. Rising competition from other fast-fashion brands like H&M was causing real problems for the family-owned Forever 21.Advertisement
In 2018, Forever 21 began downsizing and closing a number of European stores in Amsterdam, Dublin, and the UK, as well as some stores in North America.
In the first quarter of 2019, H&M Group — the parent company of H&M that also owns brands including & Other Stories and Cos — reported a 10% increase in net sales.Advertisement
Around that time, Business Insider's Bethany Biron visited a Forever 21 and an H&M store in New York's Westfield World Trade Center mall and saw that H&M drew more shoppers with its organized and well-lit store.
Though Forever 21 did not — and still does not — publicly disclose its finances, store closures in major global markets suggest that the teen retailer has struggled to find its footing in an increasingly competitive market.Advertisement
In June, Bloomberg reported that Forever 21 was exploring options for restructuring its business with private-equity firm Apollo Global Management.
By July, the Changs were no longer billionaires and their combined fortune had slumped to $1.6 billion, or $800 million each, Forbes reported.Advertisement
The Wall Street Journal reported that the retailer could file for bankruptcy as soon as Sunday.
On Thursday, Forever 21 denied to Business Insider that it had imminent plans for bankruptcy, despite reports.Advertisement
- Netflix launches Hindi user interface in India — two years after Amazon Prime Video
- Vistara won't back out of contracts with Boeing and Airbus due to coronavirus impact
- COVID-19 cases in India cross 2 million
- Dr Kasturirangan, the mind behind the New Education Policy, used to head India’s space agency
- India’s national capital has unveiled its own incentives and policy to push more EVs