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  • FOREVER 21, the 5th largest fast fashion retailer in the United States, is reportedly facing

  • bankruptcy. Founded in 1984 by a Korean-American couple, FOREVER 21 operates more than 800

  • stores in the U.S., Europe, Asia and Latin America. This week Korea Now will look into

  • FOREVER 21 and the story of its rise and fall.

  • FOREVER 21 began as the store called Fashion 21 with 900 square feet (84㎡) in Highland

  • Park, Los Angeles. Do Won Chang and his wife Jin Sook Chang, who immigrated to the U.S.

  • from South Korea in 1981, opened the store in 1984 with only US$11,000 in savings. After

  • the store took off in LA, they expanded to other locations and the store's name was changed

  • to FOREVER 21. Originally FOREVER 21 only sold clothes for women but later expanded

  • to menswear as well. The company now sells accessories, beauty products, home goods and

  • clothing for women, men and girls. And the clothing is sold to all ages, from toddlers

  • to adults.

  • FOREVER 21 is known for its trendy styles and low pricing. Designs similar to those

  • seen in South Korea were sold to and targeted at the LA Korean American community. In its

  • first year in operation, sales totaled US$700,000 and by 2013 it generated a revenue of US$3.7

  • billion. It currently operates more than 800 stores in 57 countries around the world with

  • about 30,000 employees. It has more than 500 stores in the U.S. alone, including a huge

  • store near the White House in Washington D.C. Mr. and Mrs. Chang were listed on Forbes'

  • 2019 billionaire list with their total net asset estimated at US$1.5 billion.

  • However, FOREVER 21 has faced a major crisis due to the recent downturn cycle in the clothing

  • distribution industry. As e-commerce companies such as Amazon started to dominate the clothing

  • distribution market, offline clothing retailers have not been able to escape a liquidity crisis.

  • According to Bloomberg, FOREVER 21 is preparing for a potential bankruptcy filing as the fashion

  • retailer's cash dwindles and turnaround options fade. The company has been working

  • on restructuring its debt, but negotiations with possible lenders have so far stalled.

  • Therefore, focus has shifted toward securing a potential debtor-in-possession loan to take

  • the company into Chapter 11, even as some window remains to strike a last-minute deal

  • that keeps it out of court.

  • The company has also been involved in various copyright controversies. Most recently, the

  • pop star Ariana Grande is suing FOREVER 21 and seeking US$10 million in damages, claiming

  • that the retailer used her unauthorized likeness in a social media campaign.

  • Bankruptcy filing does not mean that FOREVER 21 will be closed. It would rather help the

  • company shed unprofitable stores and recapitalize the business. However, the fact that FOREVER

  • 21 is preparing for potential bankruptcy can be big news to American teenagers born in

  • the 1990s, because FOREVER 21 was a kind of trend setter for them. Let's take a listen

  • to what Jessica had to say who spent her teenage years in California in the 2000s. “When

  • I was in middle school and high school back in the states, FOREVER 21 was the place I

  • would just go to with my friends just to take picture and try on the clothes. So if they

  • all close down, I think it's going to hit me like one of my teenager memories is gone

  • Now I feel like I'm old...” What are your thoughts on this? Please let me know with

  • your comments below and thank you for watching Korea Now.

FOREVER 21, the 5th largest fast fashion retailer in the United States, is reportedly facing

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How much do you know about clothing chain Forever 21, preparing to file for bankruptcy?

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    up1217home posted on 2019/09/14
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