Do you want an insight into the way commercial fashion retail operates?
The industry is rapidly changing, and companies have to work hard to remain relevant and keep customers. As a result, many companies evolve over time and often change ownership. A good example of this evolution is Forever 21. This multinational fast fashion retailer is based in the city of Los Angeles.
In addition to an extensive collection of clothing for women, the company also sells beauty products, accessories, and home goods.
If you want to know Who Owns Forever 21? Then it’s time to find out…
A Brief History
The first store was opened in 1984 in Highland Park in the city of Los Angeles. The store was established and managed by husband and wife Do Won Chang and Jin Sook Chang, who came from South Korea. The store operated until 2020 under the original name Fashion 21.
The Early Years
When the company was first established, it sold garments similar to those in South Korea. The clothes were marketed to the Korean-American community in Los Angeles. In the first year of operation, the company made $700,000 in total sales.
The first mall-based store opened in 1989. It was opened outside of California in 1995 at the Mall of Americas in Miami. By 1997, the company operated forty stores in different parts of the United States.
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Forever 21 goes international…
The company bought the Reference Clothing Company in 2003 for $3.5 million. The first international store was opened in the United Arab Emirates the following year.
The reported revenues for 2004 was $640 million. In 2011, the company’s assets had risen to $1.4 billion, while profits stood at around $124 million. Just two years later, revenue had risen to $3.7 billion. At this point, Forever 21 was still a family-owned company, with the founders’ daughters serving as executive vice president and vice president of marketing.
The appearance of success?
The company’s total revenue peaked at $4.4 billion in 2015. Founders Jin Sook and Do Won Chang had a reported combined net worth of $5.9 billion. However, most of the company’s international stores were reported to be losing money.
Competition And Bankruptcy
The company’s revenue had started to decline dramatically by 2017. The retailer company had announced plans to reach the $8 billion mark by this year and open six hundred stores. However, it quickly became apparent that this goal would not become a reality. The sales of the new F21 Red stores were around 50% below the sales targets.
A lot of the reason for the diminishing sales was competition from other fast fashion brands. To minimize losses, the company began closing its international stores. In 2018, all stores were closed in the Netherlands, Thailand, and Ireland, followed by Taiwan in 2019.
Expanding too quickly…
By 2019, Jin Sook and Do Won Chang had lost their billionaire status. The company tried new tactics to gain new customers and increase its share of the market. Many of these tactics backfired, such as the weight-loss bars, which led to accusations of fat shaming.
In 2019, Forever 21 suffered from a 32% decline in global sales. One of the reasons for this was that the company tried to expand too quickly. Many of the international stores were too large for the market, which also resulted in high rental fees.
More International withdrawals…
The company filed for Chapter 11 bankruptcy protection in September 2019. To more effectively manage revenue, the company decided to downsize dramatically. All stores were closed, and operations ceased in forty countries around the world.
This has allowed the company to focus on the most profitable areas of its operations. This includes the United States and Latin America, as well as licensing agreements and e-commerce. The following year, the company withdrew from Canada, Japan, Portugal, and Hong Kong.
In February 2020, Forever 21 signed a deal to sell all of its assets to Simon Property Group and Brookfield Properties. This consortium of mall operators reportedly paid $81 million to take over the company. In addition, the brand management firm Authentic Brands Group also bought significant shares in the company.
Once the deal was complete, Authentic Brands Group employed Daniel Kulle to serve as the new CEO. Following the takeover, Forever 21 expanded into Latin America through a series of licensing deals. However, Kulle only held this role at the company for two years.
About The Founders
In the initial years, Do Won Chang and Jin Sook Chang enjoyed impressive success with their fashion brand. Despite reaching billionaire status, they have reportedly lost close to $4 billion since 2015. Despite working hard to keep their company afloat, they were eventually forced to file for bankruptcy.
The couple’s children also had an entrepreneurial spirit and played major roles in the company. The two daughters co-founded the accessory and cosmetics brand Riley Rose. Products from this brand were sold in the company’s stores and online.
Take Over avoids bankruptcy…
The $81 million offer to take over the company effectively saved the family from bankruptcy. Today, Do Won and Jin Sook live with their daughters Esther and Linda. They have a palatial home in the city of Beverly Hills, California.
The fashion brand is currently owned by the apparel chain operator Authentic Brands. This group owns 37.5% of the company. The remaining shares are owned by the Simon Property Group and Brookfield Property Group, which is also known as the SPARC group.
However, the groups failed to make a profit straight away. Despite clear and detailed marketing strategies, profits continued to decline. This forced the company to go into bankruptcy once again.
Keeping the company private…
To help resolve this, the company filed to go public in 2021. It was then ready to be listed on the New York Stock Exchange. However, the IPI plans were withdrawn in January of 2023.
Instead of going public, the new owners of the company agreed to sell a stake to two private equity firms. The deal with HPS Investment Partners and CVC Capital Partners was valued at $12.7 billion. This figure includes the fashion brand’s previous debt.
CEO Winnie Park
On 19 January 2023, it was announced that Winnie Park would be the new CEO of Forever 21. Park is the former CEO of Paper Source. It is hoped that her vision and expertise will be able to increase company revenue and brand recognition.
This experienced and shrewd businesswoman has helped to rejuvenate a number of other brands during her career. Her main focus is increasing a company’s presence on different social media platforms. Fans of brands are encouraged to engage with companies, share their stories, and interact with other fashion lovers.
She comes with hefty experience!
Before taking on her new role, Park worked at luxury retailer DFS for nine years. She was responsible for launching the company’s first international e-commerce website. She also currently sits on the audit committee and board of Dollar Tree.
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Do You Have A Love For Fashion?
Well then, you’ll love the selection of fabulous opportunities that can be found in our guide to the Forever 21 Application and the most common Forever 21 Interview Questions, the Levis Application and Levis Strauss Interview Questions, as well as the Guess Application and the most frequently asked Guess Jeans Interview Questions in 2023.
Furthermore, you’ll want to check out our guides to the Saks Fifth Avenue Application, the Barneys New York Application, the Neiman Marcus Application, and the Ralph Lauren Application for your more high fashion options, or perhaps you’d like the Express Application, the DressBarn Application, and the Its Fashion Application.
If you’re still not sure which position would suit you best, take a look at our Sales Associate Job Description, and the most common Sales Associate Interview Questions, and even our Fashion Designer Job Description and Fashion Designer Interview Questions you’re most likely to be asked on the big day!
Forever 21 was established more than four decades ago and currently boasts around 540 outlets. The company is currently operated in partnership between the Simon Property Group and the Authentic Brands Group.
Forever 21 is best known for offering fashionable and trendy clothing at very low prices. Over the years, the company has been involved in several controversies. However, Forever 21 has managed to weather the storm due to tactics such as clever marketing and a solid product range.
Enjoy your shopping at Forever 21!