The Reset Button Pushed By Forever 21

The Reset Button Pushed By Forever 21
Case Code: BSTR600
Case Length: 19 Pages
Period: 2019
Pub Date: 2020
Teaching Note: Available
 Price: Rs.500
Organization: Forever 21
Industry: Retailing
Countries: United States
Themes: Bankruptcy & Turnaround Management, E-Business Strategy, Restructuring
The Reset Button Pushed By Forever 21
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

Forever 21, a US-based fashion retail brand headquartered in Los Angeles, California, was started by a South Korean immigrant couple, Jin Sook and Do Won Chang, in 1984. Forever 21 was a forerunner in the fast fashion industry and, spurred by its initial success, it started opening new stores at frequent intervals. But on September 29, 2019, Forever 21 filed for Chapter 11 bankruptcy protection to restructure its business. The company said, "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." The company had 549 stores in the US and 251 stores in other countries at the time of filing bankruptcy. The company said it planned to "exit most international locations in Asia and Europe" but would continue to operate in Mexico and Latin America. It was expected to close up to 350 stores worldwide, including 178 stores in the US. A Forever 21 spokesperson said the retailer expected to have between 450 and 500 stores globally after this process. The case discusses the origin and growth of Forever 21, and the factors that led to its downfall – rapid expansion, global recession, retail apocalypse, and changing consumer preferences.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand the external factors that can affect the performance of an organization
  • Understand the internal factors that can affect the performance of an organization
  • Study how companies can adopt the online platform for growing their business

Contents

Keywords

Retail Apocalypse, E-commerce, Sustainability, Bankruptcy, Store Expansion, Retail Strategy, Environment, Chapter 11, Restructuring

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