Just a couple of years ago, Forever 21 was among the hottest brands around, especially for younger shoppers.
Thanks to their trendy yet affordable clothes, the fashion retailer managed to charm a large customer base. Their current situation is a far cry from these glory days.
After going bankrupt, its owners have now struck a deal to sell their once-promising retail empire. But how did things come to this end?
The Brand’s Origins
Forever 21 founders Do Won and Jin Sook Chang are South Korean immigrants, who came to the United States in the early ‘80s. Without a college education, the couple ended up working multiple jobs to get by.
Their fortune would eventually change though after Do Won took note of how those who drive the nicest cars were also in the apparel business at one of his jobs at a gas station. This gave him the idea to use their savings and open a store called Fashion 21 in Los Angeles.
Thanks to his wife Jin Sook’s eye for spotting easy-to-copy trends, they managed to stand out in the highly competitive industry.
Renaming & Expansion
Eventually, Fashion 21 became Forever 21 and they found even more success after the name change. The couple began opening new stores rapidly reaching a reported almost 500 stores in 2011. Four years later, they’ve expanded to open 300 more across the world.
And by 2017, the brand was valued at a whopping $8 billion. Unfortunately, things soon began to go downhill for them ending in a deal to sell the fast-fashion company for just $81 million.
The Decline
The brand’s downfall is attributed to the ongoing retail apocalypse, which is also credited for the failure of other retail giants. Forever 21’s decline reportedly began in 2016 with its sales going down by 10% and 15% the following year.
The company’s struggles also resulted in a decrease in the Changs’ net worth, which plummeted down to $1.6 billion from $5.9 billion. Forever 21 filed for bankruptcy in 2019 and closed down hundreds of its stores.
It recently reached an agreement with Authentic Brands Group, Simon Property Group, and Brookfield Asset Management. The sale is still subject to the approval of a judge at the moment.