Forever 21, the fast-fashion chain that filed for bankruptcy, offers a model for how big retailers may need to rethink business for the digital age — and Linda Chang, executive vice president, has pledged to put her family’s brand back on track.
But Chang admitted that if the store plans to survive, it needs to take into account customers’ changing tastes and the heavy prevalence of online shopping.
“The retail industry is obviously changing — there has been a softening of mall traffic and sales are shifting more to online,” she told the New York Times. “It’s still a massive market but we do want to make sure we get ahead of things and that we’re not just staying put while the consumers are changing.”
Chang’s parents, who founded the business in the 1980s after immigrating to Los Angeles from South Korea, still run the chain and had planned to turn it over to their daughters. Her sister, Esther, is also involved in running the business, although Linda is more frequently quoted in news media.
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Revenue for Forever 21, which generates about 16 percent of its sales from e-commerce, was $3.3 billion last year — a sharp decrease from $4.4 billion in 2016. As part of its Chapter 11 filing, it will close operations in 40 countries and shutter up to 178 stores in the United States.
The Chang sisters had a big hand in helping to make the store a popular destination for cost-savvy teenagers in the early 2000s — they went from working behind the cash registers and sticking price tags on clothes while they were in high school, to developing a more robust marketing, graphic design and merchandising arm as adults. Low prices and behemoth building spaces kept the brand in competition with stores like Urban Outfitters and H&M.
The company still aims to keep men’s and women’s merchandise below $50, but it will likely scale down in other areas such as cosmetics — including a beauty brand the sisters created in 2017.
With financial backing from lenders as well as new capital, the company has support and remains committed to delivering fast-cycling fashion trends that made the brand so popular, Chang said in a statement.
“We are confident we will emerge as a stronger, more competitive enterprise that is better positioned to prosper for years to come,” she said.
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