Rags to Riches

In a world where innovation is the key driver to progress, Forever 21’s fast-fashion business model excels exceptionally. Arriving in Los Angeles penniless in 1981, Do Won “Don” Chang and his wife struggled to balance three part-time jobs to make ends meet. It all began in 1984, when the duo opened up their first store, Fashion 21 in Los Angeles, California. Mimicking the fast and affordable street fashion of Seoul, the South Korean immigrant couple made remarkable accomplishments within just one year. With sales soaring over $700,000 in less than 12 months, they began opening a new store every six months. As of 2016, the privately held fashion empire has generated a revenue of $4.6 billion and boasts more than 700 stores across the world.

Straying from traditional models of fashion retailers, Forever 21 thrives on a fast fashion business model by relying on a constant influx of merchandise. In fact, the idea of moving merchandise quickly from the designer’s table to the sales floor has brought them immense success, even outperforming its non-fast fashion counterparts.  Coupled with relatively low price points, these fresh off the runaway items reign supreme among fashion forward yet budget conscious consumers. With a limited production season, merchandise is usually not replenished once it is sold out. Knowing this, shoppers purchase items as soon as they lay their eyes on it. This revolutionary business model thus creates huge demands while assuring quick turnover, resulting in huge profits for the retailer.

Even with the company’s tremendous growth, it has remained a family owned business with Don serving as CEO, his wife serving as merchandising officer and their two daughters monitoring the marketing elements of the company. “Forever 21 gives hope to people who come here with almost nothing,” said Don, wishing that his humbling rags to riches experience will serve as an example for newcomers in the United States to not give up and pursue their dreams.