Yesterday fast-fashion retailer, Forever 21, filed for Chapter 11 bankruptcy after months of speculation. Dropping sales, closing stores and controversies have plagued the retailer for years, and now it seems that it's caught up with itself.
Since its inception in 1984, Forever 21 has been the go-to destination for American teenagers to get their hands on the hottest trends and cute clothes at an affordable price. One of the first of its kind, Forever 21 was a trailblazer for fast fashion and its young demographic. So, what went wrong?
The store was originally founded in LA in 1984, trading under the name Fashion 21. The founders, husband and wife, Do Won Chang and Jin Sook Chang, from South Korea, opened the store with the hopes to reach the young Korean-American demographic. Using styles similar to those in South Korea, the store was hugely successful, and within its first year, its sales totalled $700,000. It then opened more than 800 stores across the globe, including one in Martin Place, Sydney, in 2016. The estimated value in 2015 was $4.4 billion, with Chang’s net worth of $6.1 billion, according to Forbes.
Forever 21’s first store, then known as Fashion 21.
Forever Riddled with Controversies
Forever 21 may have been equipped with some trendy clothes, but they didn’t come without controversies. In 2011, the retailer had been sued more than 50 times regarding copyright, knock-offs and other legal battles.
- Diane von Furstenburg sued Forever 21 for copying four DVF dresses (Aubrey, Edison, Parr and Cerisier) in 2007. “While this is an isolated incident for DVF,” said Diane von Furstenburg. “It is unfortunate that way too many others intentionally build businesses by stealing the work of other designers.”
- Gwen Stefani, Anna Sui and Trovata sued Forever 21 for knocking off designs. According to Jezebel, Anna Sui’s designs were copied by Forever 21 more than 20 times before she took legal action.
- In 2019, Ariana Grande sued Forever 21 for $10 million after allegedly using her likeness and lyrics from the hit song, 7 Rings, in an ad campaign. Earlier in 2019, she was approached by the retailer for a collaboration, which was ultimately turned down. According to reports, the collab was rejected following the brand turning down the price it would cost to endorse ‘a celebrity of Ms Grande’s stature’.
- In 2015, Adobe, Autodesk and Corel filed a joint lawsuit against the fast-fashion retailer for allegedly selling unlicensed copies of Photoshop, AutoCAD and PaintShop Pro, ‘even after being contacted by Adobe regarding the infringement’.
Left: DVF’s Aubrey dress. Right: Forever 21’s dress
Even small controversies have made waves for the fast-fashion retailer, including allegations of fat-shaming, sexist connotations and selling jewellery with toxic metal cadmium. It seems that controversy seemed to follow Forever 21 around every corner, but with every pitfall, the retailer somehow landed on its feet. So, what did they do right?
What Did Forever 21 Get Right?
A company hat stayed afloat for more than 30 years must have done something right, and that was fashion. Aiming its products to the young demographic and charging affordable prices is a sure way to capture the attention of customers.
Despite its multiple lawsuits, Forever 21 created clothes that represented the latest fashion that was almost fresh off the runway. This is an attractive asset for any customer, especially as no item was priced over $60. Its motto ‘Buy it now, or it’s gone‘ also stood out to its customers. Creating a sense of urgency was the icing on the cake for Forever 21 lovers.
Fashion junkies were on the edge of their seat when new designs dropped. When the retailer first started, Mr Chang asked its customers what they wanted to see on the racks, and Forever 21 delivered. It also provided attire for customers of all demographics (eventually). Although aimed at the young women of the world, Forever 21 also carried men’s, plus size, kids and maternity lines.
What Forever 21 Could Have Done
If a brand can’t stay afloat, it has to find a way to stop itself from drowning. While Forever 21’s brand strategy worked ten years ago, it’s far from a successful strategy today.
Forever 21 could have upped its social media game – Competition like Fashion Nova, a social media savvy online retailer, hit the nail in the metaphorical coffin for Forever 21. Fashion Nova currently boasts 15.9 million followers on Instagram, posting more than 30 images a day. With five brick-and-mortar stores across the US, the primary source of income is from its e-commerce channel. In 2017, Fashion Nova was one of the most searched brands on Google, alongside Gucci, Supreme, Chanel and Louis Vuitton.
Forever 21 could have collaborated with prominent designers – In an effort to avoid the 50+ copyright-related lawsuits, Forever 21 could have pushed a significant focus onto collaborations. H&M showcases a new collaboration every few months, including designers such as Kenzo, Moschino and Karl Lagerfeld. While the retailer does have some collabs under its belt, the brands in question (Pepsi, Baby Phat, Wilson, etc.) don’t have the same gravitas as H&M’s do. A collaboration with a designer such as DVF may have also stopped a copyright infringement in its tracks.
Forever 21 could have aged with its demographic – Not every teenager wants to wear a T-shirt that says ‘I don’t care, I’m getting tacos’. Sometimes, they want to wear something subtle but still in fashion. Ageing gracefully as a brand means you have to change things up, and not be afraid to change. What was in fashion ten years ago (quirky prints on shirts) is by no means in fashion today. It’s the equivalent of selling an iPhone 3G as the iPhone 11 Pro Max comes out. The aim for Forever 21 during its Golden Age was Generation Y (now known as Millennials) – Generation Z are a whole new kettle of fish. They don’t want ‘quirky’ designs; they want something timeless, edgy and high-fashion. Streetwear is the hottest thing right now, so take a leaf out of Balenciaga’s and Off-White’s books and listen to what customers are really after now.
What Happens Now?
The U.S. fast-fashion retailer, Forever 21, has filed for Chapter 11 Bankruptcy after months of deliberation. The clothing retailer will close 178 of its 800 stores throughout Northern America, but will not be closing up shop any time soon. “This does NOT mean that we are going out of business – on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future,” a statement by the retailer read.
“We are confident this is the right path for the long-term health of our business. Once we complete a reorganisation, Forever 21 will be a stronger, more viable company that is better positioned to prosper for years to come. We look forward to continuing to provide you with the great service and curated assortment of merchandise that you expect from us.”
It seems that Forever 21 has room to move and grow, but if it sticks to its own narrative of listening to its customers, maybe only then it can reach its previous reputation. Otherwise, Forever 21 will be left behind while others succeed.
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