Name: How much do you know about clothing chain Forever 21, preparing to file for bankruptcy?
Uploaded: 2019-09-14T17:14:57.000Z
Duration: 3 min 47 s
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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

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

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.