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Steal This Look
Will a wave of piracy lawsuits bring down Forever 21?
By Jeff Koyen
Not too long ago, a down-market clothier could sell cheap runway knockoffs for pennies on the dollar and no one cried foul. After all, major fashion designers didn't exactly lose customers when suburban day-trippers picked up "Channel" clutches on Canal Street. But in the late '90s, cheap-chic mega-retailers like H&M, Zara, Mexx, and Topshop figured out that with breakneck turnaround and passable construction standards, they could offer affordable pieces haute enough for even the trendiest Condé Nast assistant. Best of all, aspiring Carrie Bradshaws didn't seem to care if their garments disintegrated within weeks.
At first glance, Forever 21, a clothing chain run by a devoutly religious husband-and-wife team, seems strangely out of place in this clique of cheap-chic powerhouses. Stockholm-based H&M employs 60,000 people and is run by a 12-member board of directors. Zara is the giant flagship brand for Spain's Inditex. Mexx, based in the Netherlands, is owned by Liz Claiborne. And the UK's Topshop is a division of retail giant Arcadia. Forever 21, in contrast, operates in relative obscurity from a shabby corner of Los Angeles. The company has no famous designers or ad budget, nor a single public relations flack. Yet its revenue topped $1 billion in 2006, catapulting Forever 21 into the ranks of the top 500 privately held companies in the United States. In just five years, it has quadrupled in size, crushing competitors like Rampage and Gadzooks—and is putting the squeeze on mighty retailers like the Gap. In 2001, the house that khakis built posted a $7.7 million loss, while Forever 21 boasted 64 percent growth in revenue thanks to 36 new stores sprinkled across the country.
How did an operation founded by poor Korean immigrants and headquartered in L.A.'s sweatshop district so rapidly become a player in an industry dominated by huge European conglomerates? Its founders chalk it all up to hard work and a frugal corporate culture. Others allege outright design theft. In the past year, the company has faced more than two dozen federal lawsuits for piracy, brought by labels including Anna Sui, Diane von Furstenberg, and Gwen Stefani's Harajuku Lovers, along with a raft of fabric manufacturers.

At the center of the storm are Do Won "Don" Chang and his wife, Jin Sook, the ferociously private, deeply Christian couple who founded the store 24 years ago. "In L.A.'s Korean community they're a constant topic of gossip and speculation. Everyone has a story about being screwed by them," says a local fashion player. "But you have to admire their success. People join their church just to get close to them," he adds.
The Changs, now in their fifties, emigrated from South Korea to California in 1981. According to company lore, it was while working at a gas station that year (one of his three jobs) that Don noticed the nicest cars were driven by people in the fashion industry. Shortly thereafter, the Changs put their native tongue to use making deals at local garment factories, and in 1984, they opened Fashion 21 in a low-rent area near Pasadena. From the start, the store featured the bright lights, loud music, and friendly staff that quickly became its trademark. It peddled a wide array of cheaply made skimpy clothing, carefully chosen by Mrs. Chang herself. A former hairdresser with a keen eye for salable new trends, she acted as the chief merchandiser, personally selecting fabrics and designs for the company's tailors to knock off. A hard-charging, fastidious woman, she remains obsessively hands-on with all aspects of the business, while her more retiring husband, Don, mainly attends to the company's finances.
By 1995, as growing numbers of teenagers flocked to the L.A. store in search of bargains, the Changs had changed the name of their company to Forever 21 and opened their first store outside California, in Miami's Mall of the Americas. Six years later, their empire had grown to 100 locations. In a daring but ultimately prudent move, the Changs chose not to advertise, instead putting their money toward premium real estate that attracted heavy foot traffic. Then, in 2004, around the same time they opened their first Manhattan store, Forever 21's inventory began to evolve from miniskirts and tights for teenage girls to include fashionable coordinates for respectable adults. The gamble paid off. Today, more than 400 stores—in the U.S., Canada, Singapore, Malaysia, Jordan, and the United Arab Emirates—operate under the Forever 21 umbrella, including Forever XXI (the large urban flagship), For Love 21 (accessories), Heritage 1981 (an attempt to penetrate the midmarket), and Twelve By Twelve (an attempt to penetrate couture), with more on the way.
A faded Fashion 21 sign still hangs outside their first L.A. store, which has changed surprisingly little since it opened. Inside, it remains a garish, disorganized explosion of semidisposable apparel. But even in this modest 900-square-foot corner space, Mrs. Chang's vision is very much evident: She has always believed that shopping should be "a little bit of a treasure hunt." Fresh merchandise arrives every day—a typical store will roll over 20 percent of its stock in a given week. The constant turnover is key to the chain's appeal: If you like something, you must buy it right now, as you may never see another one like it again. Typically, midmarket competitors like the Gap, Old Navy, and Urban Outfitters need three months to take an item from design to rack. For Forever 21, the cycle is reduced to a matter of weeks. To produce on such a tight schedule, the company depends on flexible, eager manufacturers, and doesn't waste time on original designs. Instead, immediately after the season's latest styles hit the runways or trade shows, they are duplicated by the company's journeyman designers around the world, and often arrive on shelves before the originals do. Stroll through a store, as I did recently in New York, and the knockoffs are easy to spot. On the ground floor, a black shift dress descended from a Gucci design is priced to sell at $24.80. Upstairs, a Marc by Marc Jacobs–inspired checkered peacoat goes for $59.80, and a $22.80 white button-down smacks of Theory.


This brazen pilfering of high-end fashion has left the injured parties in something of a bind. The variations and permutations that define fashion—hemlines, stitches, sleeves—sit outside of U.S. copyright law; only logos and brand names are protected. "Just about every other area of creativity gets some kind of protection. Fashion design gets next to none." says Susan Scafidi, a professor of copyright law at Fordham Law School who runs counterfeitchic.com. "And Forever 21's rip-offs are, in many cases, extremely blatant."



But while the designs aren't protected, the original fabric prints may be. Which is why, when Forever 21 produced a rose-patterned dress clearly "inspired" by a Betsey Johnson original in 2007, Betsey Johnson, Inc., didn't sue. Instead, Carole Hochman Design Group, the Johnson vendor that actually created the pattern, took Forever 21 to court.

In a bid to curtail copycats, Representative William Delahunt introduced the Design Piracy Prohibition Act in 2007. As president of the Council of Fashion Designers of America, Diane von Furstenberg is a key proponent of the legislation. Oddly enough, though, she's also one of the few claimants to have settled with Forever 21, under undisclosed terms in September.