Most retailers are tapping the brakes as they navigate a rocky economy. Forever 21 Inc. has its pedal to the metal.
The fast-fashion retailer is expanding around the globe, increasing product lines and opening showy new stores. The largest yet, which at 90,000 square feet on three levels will be bigger than the size of the Rose Bowl playing field, is scheduled to open in Times Square next year. In South Korea, the birthplace of owners Don and Jin Sook Chang, Forever 21 is preparing to develop a mall adjacent to Inchon International Airport.
The Changs' recipe: Create a niche, and then blow it out.
Having built a $1.8-billion business by focusing on trend-hungry, cost-conscious young women, privately held Forever 21 envisions its future as a comprehensive fashion department store chain, selling clothes and accessories for teens, women, men and children. The Los Angeles-based company has spent $47 million buying competitors -- Rampage and Gadzooks -- and has doubled its square footage over the last 2 1/2 years. The goal is to become a "global retail conglomerate," said Christopher Lee, Forever 21's senior vice president. "Where there's a flash of opportunity, we're stepping in."
Don Chang, who pumped gas, washed dishes and cleaned offices after he and his wife arrived in the U.S. a quarter-century ago, has another way of putting it. "We are," he said, the "American dream."
Forever 21 is known in the industry for its knack for spotting what sells -- or what will sell -- getting it into stores quickly and replenishing merchandise to keep up with what's hot. "Literally, you'll see something on a runway, and they get it into the stores in the next month," said Christine Chen, an analyst at Needham & Co. in San Francisco. "It's really unbelievable."
Critics have claimed it's something else. Forever 21 said it was working to settle what's left of a couple dozen copyright- and trademark-infringement lawsuits, and the company was embroiled earlier in the decade in a legal battle with employees of Forever 21 subcontractors who claimed they worked six days a week, sometimes 12 hours a day, for far less than the minimum wage. The matter was settled out of court and the company, which admitted no wrongdoing, agreed to take steps to ensure that its garments were not made in sweatshops.
Sales, meanwhile, continued to climb. The company has forecasted revenue of $1.8 billion this year, up from $1.3 billion in 2007. And for 2009? The projection is $2.5 billion.
