Forever 21 Bankruptcy

Nur Rizka Mardhatillah April 4th, 2020 [email protected] FOREVER 21 BANKRUPTCY In 1981, Chang’s couple moved from South Korea to Los Angeles without a business knowledge and spoke some English. Three years later, with a budget of $11,000, Changs launched a retail shop named Fashion 21. They took advantage of the auction offer and marketed it at a discount. Their system worked. During the first year, the business earned $700,000. Fashion 21 is popular with the Korean-American community in LA. They increase their success by launching a new store every six months and they even adjust their name to Forever 21 to highlight that it is \"about everyone who wants to be trendy, fresh and young.\" The secret to a company's growth is simple, increasing customers by selling trendy apparel at low rates. As a result, Forever 21 is one of America's biggest retail tenants with 480 stores around the world. The company expanded steadily in 2015. They've been America's wealthiest couple. Throughout 2017, the company's emphasis was on rising, their growth was rapid, and caused its downfall. Just three years, 600 new outlets have been opened globally. The aspect that makes Forver 21 popular is fast fashion which only offer selected models for a short period. However, as the business focused on becoming larger, its designs have become more \"cookie-cutter.\" As a consequence, Forever 21 is beginning to lose touch with its core clients and raise $500 million in debt in 2018. Part that leads the business to fail is that it focuses on getting bigger and being \"money driven.\" They are not paying heed to the design and quality of their products. Based on comments on the video, their design is too childish lately, it seems like their market's target is under 21. They put a dumb quote like \"Pizza is Good\" and the quality is poor because when the product washes, the color is faded. Moreover, they are too late to adopt customer behavior particularly when it comes to online shopping, as nowadays, millennials pay for 60% of their online purchases. In addition, their store is so big. On entering the shore, the customers will feeling lost. It also confuses the customer with taking a choice as so many products have been supplied there. Their design also do not suit the demand for the international store. Thus, the company need to focus on being “consumer driven” with further study of the market survey.