Forever 21 is owned by Authentic Brands Group, a group that in 2020 generated $489 million in revenue and comprised over 30 brands spanning various lifestyle categories. The principal shareholders include BlackRock, Leonard Green & PartnersGeneral Atlantic Simon Property GroupLion Capital.
| Aspect | Description | Analysis | Examples |
|---|---|---|---|
| Products and Services | Forever 21 is a fashion retailer offering a wide range of trendy clothing, accessories, and beauty products for young adults and teens. The company provides fashionable and affordable apparel for both women and men, with a focus on fast fashion. | Forever 21’s primary focus is on providing affordable and trendy clothing to a youthful demographic. Its fast fashion approach emphasizes quick turnover of styles and frequent new arrivals. | Women’s and men’s clothing, accessories, beauty products, athleisure wear, and seasonal fashion items. |
| Revenue Streams | Forever 21 generates revenue primarily through the sale of its fashion products. This includes in-store and online sales. Additional revenue may come from collaborations, licensing agreements, and partnerships. | Sales of fashion products are the core revenue source. Collaborations and licensing agreements can provide opportunities for revenue diversification. | Revenue from clothing and accessory sales, licensing income from branded collaborations. |
| Customer Segments | Forever 21 targets fashion-conscious young adults and teenagers, typically aged 18-24. It appeals to individuals seeking affordable and trendy clothing options to express their personal style. | Forever 21’s target demographic is young and fashion-forward, making it a popular choice among those looking for budget-friendly and trendy apparel. | Young adults, teenagers, fashion-conscious consumers. |
| Distribution Channels | Forever 21 distributes its products through its physical retail stores, e-commerce website, and mobile app. It also leverages social media and influencer marketing for brand promotion and online sales. | A combination of physical stores and e-commerce platforms provides accessibility to consumers. Social media and influencers enhance brand visibility and engagement. | Brick-and-mortar stores, Forever 21 website, Forever 21 mobile app, social media platforms (Instagram, TikTok), influencer collaborations. |
| Key Partnerships | Forever 21 collaborates with fashion designers, influencers, and celebrities for branded collections and partnerships. These collaborations help create buzz and excitement around the brand. | Partnerships with designers and influencers provide exclusive collections and expand the brand’s reach. Celebrity endorsements and collaborations can boost brand visibility. | Collaborations with designers like Balmain, influencer partnerships for collection launches. |
| Key Resources | Forever 21’s key resources include its design teams, supply chain and manufacturing processes, brand reputation, marketing strategies, and a global network of retail stores and online platforms. | Strong design teams and supply chain efficiency enable quick turnaround of fashion styles. The brand reputation is essential for attracting young and trendy shoppers. | In-house design teams, efficient supply chain, marketing materials, global retail network. |
| Cost Structure | Forever 21 incurs costs in product design and production, marketing and advertising, rent and maintenance of physical stores, e-commerce operations, employee salaries, and inventory management. | Investment in product design and marketing is crucial for staying competitive in the fast fashion industry. Rent and operational costs for physical stores are significant expenses. | Designing and producing new fashion collections, marketing campaigns, rent for retail spaces, employee wages, inventory management costs. |
| Competitive Advantage | Forever 21’s competitive advantage lies in its fast fashion approach, offering trendy clothing at affordable prices. It leverages collaborations with designers and influencers for exclusivity and brand excitement. The brand’s focus on youthful fashion sets it apart. | Forever 21’s fast fashion model allows it to quickly respond to changing trends and consumer preferences. Collaborations and partnerships with notable designers and influencers create buzz and attract a diverse customer base. | Frequent new arrivals, exclusive designer collections, influencer marketing campaigns. |
| Value Proposition | Forever 21 offers young adults and teenagers affordable and stylish fashion choices, enabling them to express their individuality through clothing and accessories. It provides a wide range of options for staying on-trend without breaking the bank. | Forever 21’s value proposition centers on providing budget-friendly and trendy fashion options to young consumers, allowing them to explore and express their personal style. | Shopping for affordable and trendy clothing, following influencer fashion trends, exploring seasonal collections. |
The Authentic Brands Group focuses on three core elements for its brand flywheel:
- Brand Growth.
- Marketing.
- Revenue.
The Authentic Brands Group acquired more than 30 brands over the years.
Origin Story
Forever 21 is a fast-fashion retailer that was founded in 1984 by the husband-and-wife team Do Won Chang and Jin Sook Chang.
In addition to trendy, low-cost fashion for men, women, and children, the company sells beauty products, home items, and various accessories.
Let’s take a look at some of Forever 21’s history below.
Early years
Do Won (Don) Chang and Jin Sook Chang were Korean immigrants who moved to the United States in 1981.
According to Entrepreneur Magazine, Don worked three jobs just to make ends meet. While working in one of these jobs serving coffee in a gas station, he observed that many of the people who drove luxury vehicles were also in the fashion industry.
Based on this observation, Don decided to enter the apparel market.
Opened in 1984 with just $11,000, the first store known as Fashion 21 was located in the Highland Park district of Los Angeles and occupied just 900 square feet.
Incorporation
Forever 21 was incorporated in March 1987, with Don becoming CEO and Jin Sook, a beautician by trade, overseeing merchandising.
Initially, the pair wanted to sell new fashion items to the working class with a particular focus on designs that would appeal to Korean Americans.
To respond to new fashion trends before the competition, Forever 21 worked with domestic manufacturers instead of those abroad.
Don also had a knack for spotting trends one could easily copy, and Forever 21 stores rapidly become known for selling the hottest, trendiest, and newest outfits. Such was the responsiveness of the brand that some predict Forever 21 turned over 20% of its stock every week.
Expansion
The first mall-based Forever 21 store opened in 1989, and by this time, the company had 11 stores in California with an average footprint of 5,000 square feet.
The first store outside California opened in 1995, and by the turn of the millennium, there were 100 stores with some as large as 9,000 square feet.
These were later superseded in size by the Forever XXI concept. Launched in 2001, these flagship stores were situated in major metropolitan areas such as Los Angeles and Chicago and averaged around 24,000 feet of floor space.
Broad appeal
Growth continued unabated in the early 2000s despite legal action initiated by the company’s garment workers for poor working conditions.
Forever 21 acquired rival Reference Clothing Company for $3.5 million in 2003, with the first overseas store opening in the United Arab Emirates in November 2004.
Much of the company’s success was due to its broad appeal.
Unlike competitors who sold fast-fashion items to teens and young adults, Forever 21 targeted the whole family and also offered lingerie and various accessories to boot.
By 2009, Chang’s two daughters Linda and Esther had joined the family business in the marketing department and no doubt helped the company remain relevant and on-trend.
Bankruptcy
The net worth of Don and his wife reached a combined $5.9 billion at its peak in 2015.
But trouble was on the horizon, with Forever 21 admitting later in the year that most of its international locations were unprofitable and would be closed.
In 2017, the company announced lofty plans to become an $8 billion company and as part of the endeavor, launched the Red21 chain of smaller format stores with even lower prices. However, these too failed to meet sales projections.
Two years later, a combination of increased competition (both online and offline), reputational damage, exuberant expansion strategy, and prohibitive tenancy costs caused a further 32% reduction in worldwide sales.
Somewhat unsurprisingly, Forever 21 filed for bankruptcy on September 29, 2019. Operations would cease in 40 countries with a core focus on the key American markets. The company is now joint-owned by apparel chain operator Authentic Brands, Simon Property Group, and Brookfield Property Group.
Key takeaways:
- Forever 21 is a fast-fashion retailer that was founded in 1984 by Do Won Chang and Jin Sook Chang. In addition to trendy, low-cost fashion for men, women, and children, the company sells beauty products, home items, and various accessories.
- Opened in 1984 with just $11,000, the first store known as Fashion 21 was located in the Highland Park district of Los Angeles and occupied just 900 square feet. It initially sold items that appealed to working-class Korean Americans.
- The first mall-based Forever 21 store opened in 1989, and by this time, the company had 11 stores in California with an average footprint of 5,000 square feet. Aggressive expansion ensued thanks to the company’s broad appeal and ability to spot fashion trends. However, a combination of several factors meant it was forced to file for bankruptcy in September 2019.
Key Highlights
- Overview: Forever 21 is a fast-fashion retailer that was founded in 1984 by Do Won Chang and Jin Sook Chang. It offers trendy, low-cost fashion for men, women, and children, along with beauty products, home items, and accessories.
- Early Years: Do Won and Jin Sook Chang, Korean immigrants, moved to the United States in 1981. With the inspiration of luxury car owners in the fashion industry, Don decided to enter the apparel market. The first store, Fashion 21, opened in 1984 in Los Angeles with a small investment.
- Incorporation: Forever 21 was incorporated in March 1987, with Don as CEO and Jin Sook handling merchandising. The brand targeted working-class Korean Americans with trendy designs produced by domestic manufacturers to respond to trends quickly.
- Expansion: The first mall-based Forever 21 store opened in 1989, and the company’s footprint grew significantly. It rapidly expanded across California and later internationally. The introduction of larger stores called Forever XXI in 2001 contributed to the brand’s growth.
- Broad Appeal: Unlike competitors focusing on teens and young adults, Forever 21 targeted a broader audience, including families. The company’s diverse offerings included lingerie and accessories. By 2009, Chang’s daughters joined the marketing department to keep the brand relevant.
- Challenges and Bankruptcy: Despite initial success, Forever 21 faced challenges due to international location profitability, increased competition, and expansion issues. The company filed for bankruptcy in September 2019, ceasing operations in many countries. It is now jointly owned by Authentic Brands Group, Simon Property Group, and Brookfield Property Group.
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