Bloomberg Businessweek January 20, 2020 pp46-51 reports
“Forever Is a Long Time”. “The singular practices and spectacular flameout of Forever 21” By S. Berfiled, Ronalds-Hannon E, and Coleman-Lochner L.
Note: Stock photo brand unknown.
Do Won Chang and his wife Jin Sook or Mr. and Mrs. Chang as they were addressed within Forever 21-the company evolving from their start-up in 1984. As 99% owners, they maintained highly secretive business practices while rapidly growing an apparent juggernaut in fast-trendy apparel for young ladies. “It was November 2010. Businesses of all kinds were closing, but Forever 21, Inc., the most exciting name in fast fashion was expanding…”. They became “a crucial tenant for mall owners” in part because of the traffic flowing to their stores.
Being tightly controlled the leadership group of 20, said to be running the company, with rapid growth and diverse market conditions simply didn’t have or employ the critically needed expertise accross the enterprise. As a result, Forever 21 over-expanded their often lavish-brick and mortar worldwide, didn’t recognize or develop an online presence, improperly projected sales, mismanaged inventory and distribution, and were plagued by inadequate IT and accounting systems. Because the inventory assets secured loans, Forever 21 was slow to make industry standard discounting further exacerbating a bloated and aging inventory. Contributing to the decline were new competitors and Forever 21 customers falling out with fast, inexpensive and often revealing fashion. Currently in Chapter 11 bankruptcy, “The Changs are in a high-stakes staredown with their creditors” that could lead to liquidation if they don’t appropriately relinquish control and equity. See the article for interesting detail.