Forever 21 Has an Identity Crisis—and It Works

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Take the enormous Times Square flagship, for starters. The clothing it sells—casual flannel shirts alongside work-appropriate blazers, boho maxi dresses next to ripped band T-shirts—can satisfy just about anyone. Then there's its social media accounts. Over on the Forever 21 Instagram, you'll find a fashion-forward white coat on top of dapper suiting one week, and a Brooklyn-worthy plaid-shirt-and-beanie look another. The brand even has activewear, with a recent look book that would have been at home at Nike or Athleta.

So who is the 31-year-old fast fashion brand trying to target? Everyone. One of the country's largest private companies, with 480 stores around the world and over 30,000 employees, Forever 21 has a powerful hold on the teen retail market. Analysts believe the company’s branding—or lack thereof—has helped it stay ahead of competitors, many of whom are struggling to connect with a disparate customer base.

"Forever 21 is known as a one-stop destination for fashion," Linda Chang, vice president of merchandising for Forever 21 and daughter of company founders Don Won and Jin Sook Chang, writes to Racked in an email. "The Forever 21 customer includes all ages, genders, and sizes—anyone who understands the importance of fast fashion, but still appreciates affordable luxury."

Photo: Getty Images

Over the past few months, teen retail has looked more like a graveyard than a functioning market segment. Delia's filed for bankruptcy and liquidated its stores in December, just days before Deb did the same thing. Wet Seal fired almost 4,000 employees and closed most of its locations in January. Then, of course, there's Abercrombie and Fitch, which underwent a serious makeover in an attempt to become more appealing to shoppers, and Aéropostale, which is currently plagued by rumors that it will shutter completely after losing $84 million in cash last year.

While these brands are dropping like flies, Forever 21 is expanding, with plans to open another 50 stores in the next three years. Forever also pulls in strong sales—$4.6 billion worth in 2014, according to Privco—and hasn't had to struggle with a brand identity that now seems dated, since its identity is, and always has been, exceedingly fluid.

Rachel Kane, a new media consultant from LA who runs the blog WTForever 21, says she used to walk into Forever and see "crazy plastic rhinestone-encrusted, feathered ridiculousness." She wondered who was buying these out-there items, but knew that the stores were always packed.

"Forever 21 is really very adventurous, far more than other fast fashion retailers, and that’s why you’ve seen them come out ahead," Kane says. "They don’t brand themselves with any specific type of style, saying it's edgy or preppy. They just aren’t anything, and that’s what sells. Traditionally, that’s been a death sentence to brands."

Forever has been around since 1984, when it was started by the Changs, a Korean immigrant couple in Los Angeles. It didn't amass success by selling a narrow aesthetic, unlike, say, the wildly successful Brandy Melville, with its restricted color palette and sizing scheme. Instead, it chose to focus on trends—all of 'em. Its original name was Fashion 21, and the first LA store was filled with "cheaply made, skimpy clothes for teens, all produced by Korean-American manufacturers," a lengthy 2011 feature about the brand by Bloomberg notes.

Models at the European launch of Forever 21 in London. Photo: Getty Images

In the beginning, Jin Sook steered the brand's design; Bloomberg wrote that she had a "sharp eye for easy-to-copy trends." Since then, Forever has mastered the art of producing of-the-moment pieces with strikingly fast turnaround. This trend-focused, rather than brand-focused, strategy has made the company a go-to for customers who want a little bit of everything.

"Brands like Abercrombie and Fitch never moved their offer. They stuck rigidly to what they thought was their style—a washed-out Americana look—and their customer moved on," notes Ruth Chapple, trends director at Stylus Fashion. "Forever 21’s speed to market and eye on trends are absolutely spot-on. It appeals not only to the teen market, but to all customers that appreciate items that don’t have longevity and aren’t worth the financial commitment."

"Its clothing is really not an age thing," adds Dev Mukherjee, an analyst with Privco. "At Forever 21, a 16-year-old and 26-year-old can wear the same thing. A lot of brands target a specific age group; Forever bypasses that strategy altogether, which maximizes its customer base."

Many believe the company's success is now driven by the cofounder's daughters, Linda, 33, and Esther, 28. They started working at the company in 2009; Linda was brought on to run marketing, and Esther, to oversee visual merchandising. Forever saw near-immediate financial returns after bringing on the sisters. According to a Privco report, annual revenue jumped from $2.66 billion to $3.39 billion in 2011.

New York City mayor Michael Bloomberg with Forever 21 CEO Don Won Chang and his daughter Linda, the company's vice president of merchandising. Photo: Getty Images

"They understand what their customers want and give it to them," says Gary Wassner, co-CEO of fashion finance firm Hilldun. "When the customer grows up, they let them go and then cultivate the next generation. They don’t anticipate keeping them loyal for 15 years."

Linda tells Racked that Forever is constantly adding styles to "inject newness into the stores daily." Forever 21’s retail strategy is "a little bit of formula and a lot of instinct," she says. "We listen to our customers and follow the trends of global influencers, as well as the runways. That’s what fast fashion is about. Our customers love coming in and knowing there will be something on the floor that they didn’t see the day before."

This has birthed collections that tap into zeitgeist-y fashion moments like so-called festival style, which Linda tells Racked has "been a top performer across our sub-brands."

Experts point to this trend obsession as a way Forever maintains its cool factor, and it helps that its prices are hard to beat. Privco’s Mukherjee notes the materials found at Forever 21 are exactly what shoppers will find at Target or Walmart, but of-the-moment designs position the brand as "high-end wear selling at a reasonable price," as opposed to bargain clothing.

"Walmart and Forever 21 might have the same quality, but Forever gives off the perception that it specializes in fashion," echoes Jessica Fioriti, an analyst at Verdict Retail. "They know what they are doing with buying—they get on board with trends, and in a short lead time. It’s about consistency: the stores look good, the windows look good, the social media looks good. They send an overall message that they do cheap fashion well."

Photo: Getty Images

The brand also delivers higher-quality items, she adds, which elevates its status in the market. "They're able to expand their value perception by selling items like premium leather footwear," Fioriti explains. "They’re also able to target shoppers who have more money to spend on products this way."

However, the brand's reputation is far from spotless. According to a report by Privco, Forever 21 has been sued more than 50 times by designers like Diane von Furstenberg and Anna Sui for allegedly knocking off designs. Forever has also faced countless labor lawsuits that cite poor factory conditions, and was even subpoenaed by the U.S. Department of Labor in 2012 to hand over supply chain information.

This stands in stark contrast to new-wave brands like Everlane and Warby Parker, which have succeeded partly because of their environmental and social impact; even H&M has hopped on the green cause with its Conscious Collection and various eco-friendly initiatives. While shoppers might be interested in sustainable fashion in theory, Forever 21’s strong revenue numbers imply many are not ready to give up competitive pricing just yet, regardless of the repercussions that come with it.

"If you ask people directly, they will say fast fashion is wrong and unfair, but there’s still a certain fickleness in the consumer," explains Neil Saunders, managing director of retail consulting firm Conlumino. "In commercial terms, ethics don't make a difference. Young consumers will lean away from corporate and social responsibility when price is factored in."

Fast fashion is indeed here to stay, and Forever 21 has clearly figured out a recipe that works. As Kane explains it, "Forever is odd and extraordinary. You can’t please everyone all at once, and yet they do. Anyone can shop at Forever 21."