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- Forever 21’s Chapter 11 bankruptcy filing features a discussion of the American Dream.
- An entire section of the filing highlights the company founders’ early entrepreneurial spirit.
- Founders Do Won and Jin Sook Chang immigrated to the United States from South Korea in 1981.
- The married couple worked in various service jobs before saving up enough money to launch their own company. The Changs opened their first store, Fashion 21, in Los Angeles in 1984.
- Forever 21 also says in its bankruptcy filing that it hasn’t conceded defeat and instead hopes to arrange for a “rebirth.”
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Forever 21’s Chapter 11 filing on Sunday struck an optimistic tone, with the fast-fashion company discussing how it serves as an embodiment of “the American Dream.”
The filing goes so far as to define the American Dream, citing Investopedia’s definition: “the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone. The American Dream is achieved through sacrifice, risk-taking, and hard work, rather than by chance.”
Of course, the immediate and obvious fallout of the filing is anything but positive. The apparel retailer announced that it will close up to 178 stores in the US, as well as up to 350 additional locations around the world.
“The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords,” a Forever 21 spokesperson told Business Insider in a statement. “We do, however, expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the US.”
But the bankruptcy filing sought to highlight Forever 21’s continued viability as a brand, showcasing its founding couple’s origins as entrepreneurial immigrants.
Calling founders Do Won and Jin Sook Chang a “rare and exemplary model” of the American Dream, the bankruptcy filing recaps their 1981 arrival in Los Angeles from South Korea. By 1984, they had saved up enough money working service jobs to launch a 900-square-foot-store called Fashion 21 in Los Angeles’ Highland Park neighborhood.
“Once Mr. Chang’s new store began earning enough cash to keep food on the table and a roof over the couple’s heads, Mrs. Chang joined him at the store full-time,” the filing reads. “Mrs. Chang, and her nearly-clairvoyant ability to predict trends, were part of the catalyst that boosted Forever 21’s upswing.”
The Chapter 11 filing also explains the origins of the brand’s 1987 name change, saying that the founders felt “young adults saw 21-year-olds as having the independence they so desired and older adults fondly remembered being 21 and unburdened by life’s obligations and responsibilities.”
Spreading across the US and beyond, Forever 21 boasted a workforce of 43,000 employees and annual sales of $4.1 billion at the height of its powers, the bankruptcy filing says. But it also blames the company’s current struggles, in part, on that meteoric global rise, along with an overextended supply chain and a failure to resonate with shoppers in Europe and Asia.
Noting that retail as a whole is “under assault” these days, Forever 21 said that it is striving to use bankruptcy proceedings to “remain viable and write a different ending from so many retail companies before it.”
The brand is instead looking for an “operational ‘rebirth'” by closing struggling stores around the world, overhauling its merchandising brands, and wrangling better “trade terms” from vendors.