Fast fashion at a price: the story of Forever 21
When talking about fast fashion — stores that stock seasonal fashion trends as soon as they can get them off the catwalk — it's hard not to mention Forever 21 ($FOREVER21). Founded in 1984 by Do Won "Don" Chang and his wife Jin Sook Chang, it has over 800 stores and made $4 billion in 2016. Among the budget-conscious fashionistas, it's also the best place at the mall to pay $19.95 for a sweater that happens to be spot on with the latest seasonal style trends.
From Rags to Riches
The fast fashion empire began in 1981 when the Changs emigrated from South Korea to Los Angeles in search of the American Dream. They didn't speak very much English. They didn't have college degrees. They were both just 26-years-old.
To make ends meet, Jin Sook became a hairdresser, and Don worked at a gas station, washed dishes and cleaned offices. One day while pumping gas, Don made a critical observation; customers with the nicest cars all worked in the garment industry. And what's more—many of them were Korean immigrants like Don and Jin Sook.
With that observation and Jin Sook's keen eye for spotting fashion trends through her customers, the couple opened a 900 square foot clothing store called Fashion 21 in Los Angeles' Highland Park neighborhood on April 21, 1984. Fashion 21 was filled with inexpensive (to make and to sell) clothing made by Korean-American manufacturers in Los Angeles. Every item in the store was chosen by Jin Sook, and merchandise was (and still is) turned over quickly.
At the end of its first year of operation, Fashion 21 made $700,000 in sales.
The Change and Expansion of Forever 21
After the success of their first store, the Changs changed the store's name to Forever 21 and began opening new stores about every six months. Eight more stores opened in California from 1990-1996, with most of them opening in Los Angeles. In 1995, Forever 21 opened its first store outside of California inside the Mall of Americas in Miami, Florida. By the turn of the century, it had 20 total stores, and that number would nearly double at the end of 2000.
The first international Forever 21 opened in 2001 in Edmonton, Alberta, Canada, and its first overseas location opened in Abu Dhabi in 2004. In 2008 and 2009 there was a spike in store openings in the U.S. — right during the height of the global financial crisis. Apparently, those $19.95 sweaters were appealing to the masses who were facing unemployment, and the Changs capitalized on shrinking wallet sizes with major expansion plans.
A more recent expansion period from 2014 to 2016 was focused on international store openings, especially in Central and South America. In an interview with WWD back in 2014, Don wanted to "double the size of the company" over the next three years and be operating over 1,200 stores.
That first Forever 21 store is still operating on North Figueroa Street in Highland Park. The company now has 813 listed stores spread throughout Los Angeles, the U.S., and overseas, but one of the chain's largest is just 25 miles away from its original outpost. At the Los Cerritos Center in Orange County, California, there is a 86,000 square foot, two story Forever 21 store that was once occupied by a Mervyn's department store. With 22 mini shops and 131 fitting rooms, it's basically Forever 21's own version of a department store.
With this amount of growth in the fast fashion industry came some issues for the Changs, namely in the form of lawsuits that have been pretty much continuous for more than a decade. The most notable one came in 2001, when the Asian Pacific American Legal Center and the then newly created Garment Worker Center filed a lawsuit against Forever 21 on behalf of 19 workers.
Those contractors allegedly worked under sweatshop conditions to produce garments for Forever 21, saving the tags off clothing items as evidence. Although the company called these claims "meritless," the two parties settled out of court three years later.
A little over a decade later, the company was given a class action lawsuit for allegedly denying lunch breaks and not paying them for work off the clock. And later that year, the company was under investigation from the U.S. Department of Labor for its factories having "sweatshop-like conditions."
Perhaps unsurprisingly, the CEO rating for Forever 21 is pretty below average at 34%.
Social Media By The Numbers
Overall, Forever 21’s social media presence is on an upward trajectory lately, despite several controversies they’ve gotten into.
Just to list a few, Forever 21 has had...
- That one time their plus sized line on Instagram wasn’t plus enough. They made a big deal about their broad range of plus sized clothing. The only thing was, the models on the Insta for that line were not plus sized.
- That one time in 2013 when they posted pics on Twitter of white models wearing NWA inspired “Straight Outta Compton” t-shirts.
- Many, many design and copyright controversies. The most notable was with Diane Von Furstenberg in 2007, but the store has had several other lawsuits pertaining to this issue and gets flak on social media for it.
The Company Today
Even with 813 stores across several continents, Forever 21 is still a family business. Don is the CEO, Jin Sook is the Chief Merchandising Officer, and their two daughters — Linda and Esther — are also executives within the company.
The Changs have made billions, clothed millions, avoided some potentially nasty trials, and still have successful social media accounts despite numerous controversies. How long can their luck last with their lawsuits and copyright controversies? It's tough to say, but for now, it is still among the fast fashion elite with H&M ($STO:HM-B) and Zara ($BME:ITX).