Forever 21 became one of the largest and most competitive fast fashion retail brands in the world competing on cheap price points, merchandise, prime locations and rapid global logistics. This has enabled the Los Angeles based Forever 21 brand to compete directly with iconic global fashion brands like Zara (Inditex group), H&M, Uniqlo and several other industry players. At its peak in the middle of the 2010s, Forever 21 had annual sales of more than USD 4 billion from about 800 stores on six continents, and it employed some 43,000 people.
The model did not hold. Forever 21 filed for Chapter 11 bankruptcy protection in September 2019, and the founding Chang family lost the company in February 2020, when it was sold out of bankruptcy to the brand licensing group Authentic Brands Group and two of its largest landlords, Simon Property Group and Brookfield Property Partners.
In March 2025 the operator of its American business filed again, this time to wind down, and the last of its 354 stores in the United States closed on 1 May 2025. The name has outlived the business. Authentic Brands Group owns the Forever 21 trademark and licenses it to operating partners, who sell the brand online and through Walmart and Amazon in the United States and run stores under licence in other markets.
This article was first published in March 2018, when Forever 21 stood at the height of its reach. The analysis of the brand’s background, architecture and strategy that follows is kept as it was written then, as a record of how the business worked when it was winning.
A new section examines what happened to Forever 21 between 2019 and 2026, and what the fall of one of the world’s largest fast fashion retailers teaches brand owners and business families.
The Forever 21 brand and their associated lines operates over 790 stores selling men’s and women’s clothing throughout the U.S. and in Canada, Europe, Africa, Oceania and across Asia. Forever 21’s success stems from its ability to challenge top design houses in the rapidly developing ready-to-wear trends while maintaining some of the most competitive prices in the market. Not only has Forever 21 become one of the largest clothing brands in the world, but also prides itself on perpetuating the Christian values its founders hold so dear. These values can be seen with the printing of John 3:16 on the bottom of their trademark yellow bags. For Forever 21’s founder, Do Won (Don) Chang and his wife Jin Sook Chang, Forever 21 is about more than selling clothing, but the personification of achieving the American dream.
With its owners valued at USD 3.1 billion as of March 2018 and a goal to become an USD 8 billion company and open 600 new stores in the next 3 years, Forever 21 remains a privately held company. Do Won Chang remains the owner and operator, his wife continues to oversee all of the company’s merchandise while their daughters Linda and Esther Chang are the Vice President of Merchandising and Senior Marketing Director, and head of the Visual Display team, respectively. It is widely held that Linda Chang will take over the company at whatever time her father chooses to step down, reflecting its clear family legacy succession plan and making it clear that the Chang family has no desire to take their company public at any time in the foreseeable future.
The story of how Forever 21 started goes like this: Two poor Korean immigrants, Do Won Chang and his wife, Jin Sook Chang, founded the first Forever 21 store in Los Angeles, California, in 1984 as a true family run operation after they arrived to the US in 1981. Before opening their first store, Do Won Chang worked hard to make ends meet – he did janitorial work and worked at a gas station and a coffee shop.
The chain, originally known as Fashion 21, was intended for kids and teens in search of fashionable pieces at more than reasonable prices. The flagship store sold mostly trendy Korean designs targeted at Los Angeles’ Korean American community. With their unbeatable prices, other Los Angeles teens began flocking to the store and the Chang’s realized the possibility for expansion. In their first year, the company raked in USD 700,000 in sales. Six years later their empire (changed to Forever 21) had grown to over 100 locations. By 2009 Forever 21 had opened 11 department store-sized locations scattered across the United States. The Chang’s see their success stemming from their realization early on that old people want to be 21 again, and young people want to be 21 forever. They have been functioning on this model since their first store, and still do so today as their business continues to rapidly grow.
The Forever 21 brand is divided into eight sub-brands all broken up by style but housed in the same over-sized Forever 21 store ranging from 900 sq. ft. as the smallest to 162,000 sq. ft. as the largest. The average Forever 21 store is 38,000 sq. ft.
XXI Forever: The large flagship that typically houses all of the smaller labels under the Forever 21 umbrella.
Forever 21 Girls: A transformation of the original XXI Forever brand to be more suited towards a younger pre-teen audience. This line focuses on popular designs specific to the emerging pre-teen market and sizes.
Love21 Contemporary: A contemporary line for women offered at the same price point as the rest of the Forever 21 brands. This line is aimed at buyers aged over 21 allowing them to continue staying up-to-date on the latest trends while remaining age appropriate.
Forever 21+: A contemporary line for women designed specifically for plus sized customers. This line allows more curvaceous women to wear the same clothes as the rest of Forever 21 shoppers at the same price point.
Gadzooks: Acquired by Forever 21 in 2005. The clothing line sells casual clothing, accessories and shoes for 16 to 22 year old women.
21Men: Formerly known as Heritage 1981 Men’s, the Forever 21 line designed and tailored specifically for men also in their mid-20s. The designs follow the female models in the other Forever 21 stores of remaining on point and up to date with current male fashion trends.
For Love21: A French boutique styled accessory store with women’s jewelry, shoes, handbags, cosmetics, and more.
Heritage 1981: This particular line is an attempt by the brand to penetrate the mid-market of consumers. With a more urban feel, this line lends itself to competing less with the big name fashion houses and their designs, but what one would find at Urban Outfitters.
Forever 21 Lingerie: Intimates and lingerie line launched in 2007.
Forever 21 Red: Launched in 2015, this brand extension caters to the price-conscious and focuses on selling core groups of clothing compared to the huge number of styles in the other lines. This line also includes men’s and children clothing.
Riley Rose: Managed by the founders’ daughters, Linda and Esther Chang, Riley Rose is the brand’s latest foray into the beauty and home items sector. The brand offers a wide variety of Korean beauty, natural skincare, sparkly makeup from both understated and established brands, an impressive assortment of hair care, and candy, small accessories, and whimsical home goods – an important point of differentiation from other beauty stores. The first Riley Rose store opened in Los Angeles in October 2017, followed by another 11 stores which opened in March 2018 across the U.S. The brand is targeted specifically for millennials and Gen Z consumers, as seen from the brightly lit store, pink colour theme and spaces designed for taking photos and sharing on social media. Riley Rose has also launched an e-shop as of February 2018.
The large and often overwhelmingly over-sized Forever 21 stores are already present on almost every continent and continue to multiply in number. Their department store-sized locations allow for all of Forever 21’s more specifically catered brands to be sold all under one roof. Their ability to maintain a store overflowing with different styles and target consumers stems from their successful branding of the buy-it-now culture. Fresh merchandise arrives every day in contrast to other similarly modeled stores like Zara where new merchandise only arrives twice a week. A typical store will roll over 20 percent of its stock in a given week and this constant turnover is key to the chain’s appeal: If you like something, you have to buy it right now, because you may never see anything like it again.
Production model: Forever 21’s strengths lie largely in their production model. Typically, mid-market competitors need three to six months to take an item from design to rack but for Forever 21, the cycle is reduced to weeks. Forever 21’s use of larger fashion houses’ designs allows them to produce so quickly. Immediately after the season’s latest styles hit the runways or trade shows, they are duplicated by the company’s journeyman designers around the world, and often arrive on shelves before the originals do.
Use of online and mobile technologies: Forever 21 launched their online shopping site early on, cognizant of the e-commerce trend that was booming during the early 21st century. Today, a large proportion of its sales come from its website as it is able to reach a wider geography of consumers. Also, realizing the increasing influence of mobile, the Forever 21 brand also has a mobile application which consumers can make purchases from, and rate the brand’s clothing on a scale of “I like it” to “Not my style” – this allows the team behind apparel design to understand consumers’ ever-changing tastes and preferences, especially in the volatile world of retail fast fashion. This also results in reduced spend on the mass production of items that might not be popular with their target fashion customers, reaping twice the result from its marketing spend.
However, as Forever 21 uses almost identical designs they continue to face lawsuits from other brands, designers and production factories for copying the physical patterns of the designs. These constant piracy lawsuits may shed a negative light on the owners, but it has yet to affect the company’s revenue, particularly because the Forever 21 customer base continues to get expensive designs at unbelievably cheap prices.
Forever 21’s production model allows the company to overtake many of its competing brands offering clothes at a similar price point. Not only can Forever 21 undersell most other companies, their ability to rapidly change their products gives them an advantage above many fashion retail companies. As Forever 21 continues to build its client base with the developing of new brands and products, they simultaneously threaten any foundation their competition mistakenly believed they had.
Also, Forever 21’s focus on retail locations rather than advertising has allowed them to occupy some of the most sought after real estate in major cities around the globe, making their products readily available and accessible to almost every market available. As they continue to expand they will also continue acquiring knowledge about the evolving global fashion landscape, and in particular about competitors like ZARA, Hennes & Mauritz (H&M), Uniqlo and many other competitors.
Moving forward, Forever 21 plans to expand into new concepts and has partnered with GGP – an S&P 500 retail real estate company owning and leasing shopping centers – to open stores in 13 of their top tier locations. These new, experiential spaces will see accessories, cosmetics and home goods as their main focus targeting the millennial consumer.
Labor disputes: Forever 21 recently faced disputes over their workers’ labor conditions and pay. The Los Angeles Labor Department reported than an investigation into Forever 21 uncovered evidence of “significant” violations of federal laws on minimum wage, overtime, and record keeping by vendors supplying the company. The suit is ongoing, which means that it will continue to tarnish the brand’s reputation as well as limit desire to work at the company.
Piracy lawsuits: While Forever 21 has already faced a multitude of piracy lawsuits (they have been sued more than 50 times for copyright infringement) they have made no changes to their design and production practices. Unless they begin using more unique designs or make deals with some of the designers they are “inspired” by, they will be forced to pay settlement after settlement until enough designers find a way to protect their designs more concretely. At that point, Forever 21 will have to completely re-approach their production model. This may include a transition closer to that of Zara’s in which they have over 200 designers but participate in the same streamlined production process. Forever 21 does not need to change their production model; they simply need to expand the designs of what they produce.
Product quality dilution: As a company whose defining quality is its price point, Forever 21 will need to maintain a competitive price despite changes in the market. This will force the company to find ways to save money in facets of production and historically when this occurs, the quality of the product often declines drastically. In addition to this, customers’ expectations are becoming more and more discerning. Forever 21 will need to balance price for a minimum level of quality in their apparel.
Managing brand architecture: As Forever 21 continues to grow and acquire new brands, they are constantly developing their sub-brands in their brand architecture and their brand design themes. If these changes become too frequent customers will potentially lose their loyalty to the brand as the brand loses its unique Forever 21 identity.
Transitioning power: As a business based largely on family, Forever 21 remains a privately held and owned family operation. As the daughters have graduated from their respective universities they are taking on larger roles within the business, clearly being groomed for an eventual transition of power. The older daughter is said to eventually take control of the company but this will inevitably lead to changes in the management and possibly operation. Forever 21 needs to make sure that even under new and younger leadership, they maintain the brand the founders so tirelessly built.
Competitors: Forever 21 has been extremely successful at maintaining its unbelievably competitive prices, significantly lower than that of Arcadia Group Ltd.’s Topshop and Inditex SA’s Zara, both of which target a slightly older consumer. In many categories, Forever 21’s products are even less expensive than Swedish company Hennes & Mauritz AB’s H&M’s products. As the fashion landscape continues to shift towards an immediate transition from runway to wearable, other brands are entering the market Forever 21 previously dominated. If Forever 21 continues to focus on location and store development, they will be able to combat this change head on as their customer reach is significantly larger than its competitors.
Forever 21 did not fail for the reasons that looked most pressing in 2018. It was not undone by the designers it was accused of copying. It was undone by three things it had always counted as strengths: its stores, its ownership and its price.
Too many stores, and too large: The Forever 21 model rested on enormous stores in prime locations. The average store measured 38,000 square feet and the largest more than 160,000, on leases signed when mall traffic in the United States was still growing, many of them in spaces left empty by failed department stores. Between 2005 and 2015 the number of stores outside the United States rose from seven to 262, and by the company’s own later account most of them were unprofitable by 2015. Sales peaked at more than USD 4 billion in the middle of the decade and went flat in 2016. When shoppers moved online and mall traffic fell, the leases did not.
The first bankruptcy: By the time it filed, Forever 21 was paying about USD 450 million a year in rent, and its stores in Canada, Europe and Asia were losing about USD 10 million a month. In its first bankruptcy filing, on 29 September 2019, the company told the court that it was carrying far more floor space than it could use, on leases signed a decade or more earlier in markets where it lost money. The plan set out a withdrawal from 40 countries, among them Canada, Japan and most of Europe, and the closure of up to 178 of its American stores.
Linda Chang, by then executive vice president, called the filing an important and necessary step to secure the company’s future. Riley Rose, the beauty chain launched by the founders’ daughters two years earlier, closed its own stores within weeks.
A family that kept control to the end: Forever 21 was a family company in the fullest sense. The Changs owned 99% of it, the company’s president, Alex Ok, held the other 1%, and the board had three members: Do Won Chang, Linda Chang and Ok. The founders ran the business and intended to pass it to their daughters, and in 35 years they took in no outside equity. The 2018 analysis above recorded that the family had no intention of taking the company public, and the bankruptcy filing itself said that the family had declined “numerous opportunities that would facilitate generational wealth” by never doing so.
The court record also shows how early the strain began and how far the family went to carry it. As early as 2016, when sales went flat, Do Won Chang lent the company USD 10 million and each of his daughters lent it USD 5 million from their own trusts. In early 2019 the company sold its Los Angeles headquarters and distribution centre and leased the offices back. Bloomberg reported at the time of the filing that the founder’s wish to keep a controlling stake had made it harder to raise new money.
The landlords become the owners: When the company was put up for sale in the bankruptcy, several strategic buyers looked and none made a firm offer, and by February 2020 the company had USD 5 million of cash against USD 24 million of rent due that month. In February 2020 the court approved a sale to Authentic Brands Group, a company that buys consumer trademarks and licenses them to operators, together with Simon Property Group and Brookfield Property Partners, the two mall owners that were among Forever 21’s largest landlords and creditors. The price was USD 81 million in cash plus the assumption of some liabilities, for a company whose owners Forbes had valued at close to USD 6 billion five years earlier.
The alternative, the company’s chief restructuring officer told the court, was liquidation. The buyers kept the brand, the stores and about 25,000 jobs. The Chang family’s ownership of the company it had founded in a 900 square foot shop in Los Angeles ended with the sale.
New owners, a new threat: The buyers were betting on the stores. Simon and Brookfield owned the malls, and keeping Forever 21 open protected their own rents. David Simon, the chairman and chief executive of Simon, acknowledged the benefit and told analysts that it was not the reason for the deal: the same partners had turned round the teen retailer Aéropostale, and he saw a business whose sourcing, marketing and technology could be improved, with Authentic’s expertise in brands to draw on.
Authentic Brands Group owned the name and would earn royalties on it. The operating company, SPARC Group, reduced the network to about 570 stores by 2022, brought in new management, launched the brand’s first advertising campaign and planned smaller stores, and for a time it worked: the American business earned USD 165 million before interest, tax, depreciation and amortisation in 2021 as the pandemic eased.
None of it changed the arithmetic for long, because the competition had changed. Shein and Temu sold the Forever 21 proposition, trend-led clothing at very low prices, without stores, without leases and with far more styles. Shein introduced some 1.5 million products in the United States in the year to November 2023, against about 40,000 at Zara, according to an analysis by the University of Delaware, and it shipped directly to customers under a customs exemption for parcels worth less than USD 800.
In August 2023 Authentic and Simon took the unusual step of inviting the rival in. Shein bought about one-third of SPARC Group, SPARC took a minority stake in Shein, Forever 21 was sold on Shein’s platform and Shein pop-ups opened in Forever 21 stores.
In January 2024 Jamie Salter, the founder and chief executive of Authentic Brands Group, told an investor conference that buying Forever 21 had been “probably the biggest mistake I made”. He had not seen Shein and Temu coming, he said. The partnership with Shein, he said later, had been only moderately successful.
Undercut on its own terms: The second bankruptcy came on 16 March 2025. F21 OpCo, the licensee that ran the brand’s American stores and website, filed for Chapter 11 in Delaware and announced an orderly wind-down. It told the court that it had lost more than USD 400 million over the previous three financial years, and that it expected a loss of USD 180 million before interest, tax, depreciation and amortisation in 2025, four years after a profit of USD 165 million on the same measure. Its chief financial officer, Brad Sell, said that the company had been unable to find a sustainable way forward because foreign fast fashion companies had used the de minimis exemption to undercut it on price and margin, and he cited rising costs and the pressure on its core customers as well. The filing named Shein and Temu.
No buyer appeared by the deadline of 30 April, and all 354 stores in the United States had closed by 1 May 2025. The timing carried an irony. The customs exemption that Forever 21 blamed was withdrawn for goods from China and Hong Kong on 2 May 2025, the day after the last store closed, and for all countries later that year.
A brand without a business: What remained was the name, and the name was what Authentic Brands Group had bought. Its business is to own trademarks and license them to others, and Forever 21 sits in a portfolio of more than 50 brands, among them Brooks Brothers, Reebok and Aéropostale, with about USD 32 billion in annual retail sales.
In September 2025 Authentic announced a new set of American operating partners: one for e-commerce and men’s wholesale, one for women’s wholesale and one for children’s wear. It described Forever 21 as a digital-first brand and said it was in advanced discussions with a retail partner to open new stores. By mid-2026 the brand was sold at Forever21.com, Walmart and Amazon, and the first campaign under the new arrangement launched in July 2026.
Abroad, licensees continued to run stores, and in August 2025 Authentic announced a fourth attempt at China with a local operator, after three entries and three exits since 2008. Forever 21 today is a licensed label: a name with wide recognition, no stores of its own in its home market and an owner that earns royalties rather than margins.
For 35 years Forever 21 was one of the most successful family businesses in American retail. Its fall holds lessons that reach well beyond fashion, because the choices that undid it are choices that many owner families make.
Control is not governance: The Changs held every role in the enterprise. They were the owners, they ran the business and they decided its direction, and the board was the founder, his elder daughter and the company’s president. No outside shareholder sat at the table, and in the family’s 35 years the company never had a chief executive from outside it.
Family control gave Forever 21 speed and a long horizon, and that is what built it. It also meant that the judgement of a very small group went untested until the market tested it. In the owner, steward and operator roles that describe how family members take part in an enterprise, Forever 21 had owners and operators but no stewards. The steward’s task, on a board, is to guard the long-term health of the business against the enthusiasms of the day and to ask whether the pace of expansion and the size of the commitments are wise. That is the role the company lacked.
Growth needs capital, and the form of the capital decides who holds power: The family would not sell shares, so the company grew on leases: long, fixed commitments on very large spaces, often running for a decade or more. When sales fell, the landlords were among the largest creditors, and in the bankruptcy they became the owners.
A family that refuses to dilute its ownership has not avoided the question of who else holds a claim on the business. It has answered it in another way. The founders of Zara and Giorgio Armani chose differently. Amancio Ortega listed Inditex in 2001, placed his controlling stake in a family holding company and handed daily management to a professional chief executive in 2005. Giorgio Armani never sold a share and set up a foundation in 2016 to secure the future of his company. Both Ortega and Armani kept control. They also built structures that could carry the business through a crisis without them.
Succession assumes the business arrives: As early as 2010 Linda Chang had said that her parents hoped she and her sister would learn the business so that they could retire. The 2018 analysis above described a clear line of succession to the next generation. Eighteen months later the family had lost the company. Succession planning answers the question of who leads next. It does not answer the question of whether there will be a business to lead.
The first duty of stewardship is to keep the enterprise adaptable enough to survive its own success. Forever 21’s founders built a model for one era of retail and expanded it at full speed into the next. The daughters were being prepared to run a business whose model had already turned.
That is the quieter lesson of the case, and it applies to every family that is grooming successors for a company that has not yet asked whether its strategy will hold. The foundation of multi-generational success in family business is stewardship of the business itself, ahead of the orderly transfer of its leadership.
The brand outlives the owners, but not for them: The Forever 21 name proved more durable than the company, and it now earns royalties for an owner that had no part in building it. For a business family the point is uncomfortable and important. The brand is often the family’s most valuable asset and its most portable one. In a crisis it is the asset that leaves first, because a buyer of a distressed retailer wants the name and not the leases.
Business families that build strong brands have every reason to protect the enterprise around them with the same care, through governance, through capital that does not come due in a downturn and through a board that can say no. The Changs built the brand. Others own it.
Families that chart strategy and succession in family business with the same discipline they bring to their products give themselves a far better chance of remaining owners.
Forever 21, like its owners, developed from one small storefront to one of the world’s largest fashion retail companies. Forever 21’s production model and price points set them apart from almost all other members of the fashion industry allowing them to continue to grow at the exponential rate they have for the past 34 years. While their quality might not compare, their ability to replicate the most current trends has even the most brand-conscious flocking to their stores. While they have been extremely successful in the past with their rapid expansion and international development, they will need to start paying more attention to their design piracy – a burgeoning problem which they may eventually be unable to simply settle.
A successful solution to this issue will mean a subtle shift in brand identity and a necessary focus on authenticity and originality in designs, but as long as the Forever 21 brand is able to maintain their price point, merchandising, and focus on location investment they are likely to remain at the forefront of the affordable designer transition in the fast fashion retail industry.
That was the verdict in March 2018, and it was wrong about where the danger lay. The threat to Forever 21 did not come from the designers it was accused of copying. It came from companies that copied Forever 21 and did it faster, cheaper and without a single store. Within 18 months the company was in bankruptcy, within two years its founders had lost it, and seven years on its American stores were gone.
The lessons are plain. Speed and price are not a lasting advantage, because someone will always be faster and cheaper. A brand built on locations is hostage to its leases. And family ownership protects nothing on its own. It has to be matched by governance that can question the owners and by capital that does not come due in a downturn.
What survives is the idea. Do Won and Jin Sook Chang built one of the largest fashion retailers in the world on the observation that older people want to be 21 again and young people want to be 21 forever. The name they gave that idea is now a licensed label, sold through other companies’ stores and websites, with a fourth attempt at China under way.
Whether a brand can be rebuilt without the business that made it is the question Forever 21 will answer next. The answer matters to every owner of a brand that is worth more than the company behind it.
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About the author: Martin Roll – Global Family Business & Family Office Expert
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