Forever 21 expands, but controversy persists




Forever 21, the Los Angeles-based “cheap chic” retailer with nearly $3 billion in revenues and 477 stores, is owned by Do Won and Jin Sook Chang, born-again Christian Korean immigrants who opened their first store in 1984, noted

a recent lengthy article in

Bloomberg Businessweek.


Their daughter Linda Chang, 29, has headed the marketing department for two years; her sister Esther Chang, 24, heads the company’s visual display team.

In seven years, the company has grown from 1 million to 10 million square feet of space. In 2011, it plans to open at least 75 more stores in five countries. In 2008, it made a profit of $135 million, without selling any item for more than $60, according to the report.

The Changs have been able to accomplish this with no advertising, virtually no marketing, and only infrequent attempts to introduce themselves to their customers.

But Forever 21 “has not prospered without controversy,” the

Bloomberg Businessweek

article said.

The company has been accused many times of not just following the trends but selling copies of clothes created by trendy designers. Some of its suppliers … have been accused of underpaying their workers.

Jin Sook Chang oversees the merchandising side of the business. Her wing of the company headquarters has its own security, and “the windows are covered with blinds”; company executives are rarely permitted to enter, the article said. Visitors are also prohibited from entering the warehouses.

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The Changs “have never been found liable for copyright infringement,” the report noted. But they have faced numerous lawsuits and a three-year national boycott organized by garment workers that began in October 2001. The company has settled most of the lawsuits.

In a 2009 suit in which a small label accused Forever 21 of copying its styles, the plaintiff’s attorney

turned up documents showing that one of the company’s biggest suppliers, One Clothing, is owned by Mr. Chang’s private investment firm, Too Capital. It was also the supplier that reached the $175,400 with the garment workers in 2004….

(Source:

Bloomberg Businessweek,

January 24-30, 2011.)

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