Forever 21's Jin Chang on Forbes Power List

Forever 21 co-founder Jin Chang placed 39th on the Forbes list of the World's 100 Most Powerful Women.

Forever 21 co-founder Jin Sook Chang placed 39th on the Forbes list of the World’s 100 Most Powerful Women released Thursday. She and husband Don Do-won Chang launched the so-called fast-fashion retailing giant in 1984 near Los Angeles.

Chang is one of just six self-made billionaire women in the U.S., according to Forbes. Don Chang, Forever 21’s president, was ranked 187th on Forbes’s richest Americans list released in March. Currently the chain has about 500 mostly franchised stores around the world as well as a number of giant flagship stores in glitzy locations in major shopping centers like New York, Tokyo, Seoul, Shanghai, Las Vegas and Paris.

The couple opened their first retail store in a 750-square-foot store in the low-rent Highland Park neighborhood between Los Angeles and Pasadena after they had been in the U.S. only three years. Their strategy was simple: sell the cheapest clothes they could stitch or buy. In the beginning Don went around buying up remaindered fabrics from sweatshops while Jin sat in the store sewing the fabric into shirts.

Don’s entrepreneurial instincts had been honed in his native Seoul, Korea. Three years before coming to California, Don had opened the city’s first coffee and natural juice delivery service in the fashionable Myongdong district. After immigrating to the U.S. Don worked three jobs simultaneously, serving coffee and pumping gas by day and working nights as a janitor. Don credits the gas station job with inspiring his move into fashion.

“I noticed that the merchants had the best cars,” he says and decided to turn his customers into competitors. In 1984 Chang struck deals with local Korean garment factories and opened their first retail store, then called Fashion 21.

The booming music and bright lights that are now a Forever 21 trademark were there from the start. Jin Sook filled the tiny store with minis and tube tops. The formula proved irresistable to its youthful clientele. Within a year sales grew from $35,000 to $700,000. Jin Sook remains the chain’s very hands-on chief merchandiser, still personally picking out fabrics and designs for the Forever 21 fashion lines.

The rapid growth of Fashion 21’s customer base of trend-hungry teens prompted the Changs to franchise their business under the name Forever 21. It was not until 1995 that the second store opened in Miami’s Mall of the Americas. Six years later Forever 21 had spread to 100 locations. As of early 2011 there were 500 stores worldwide, including in Japan, Korea, China, Thailand, England, France and the Middle East.

Starting from minis and tube tops, the Changs added increasingly sophisticated styles to age their target clientele from teens to young adults. Today Forever 21’s major appeal lies in its quick-turnover buy-it-now-or-never-see it-again ethic. The chain has become notorious for stocking stores with irresistibly-priced runway knockoffs even before the originals hit the retail racks.

The likes of Anna Sui, Diane von Furstenberg and Gwen Stefani’s Harajuku Lovers have filed over 50 federal copyright infringement and unfair competition suits over the past several years. Such suits against Forever 21 tend to end quietly with undisclosed settlement terms.

But these hiccups have done little to slow Forever 21’s success. The company enjoyed sales of over $2 billion and a net income of around $160 million for the fiscal year that ended February 2010. While others are reeling from the recession, Forever 21 is pushing ahead with new plans for adding merchandise categories like home goods, swimwear and a junior’s plus-size collection. In 2009 it even paid $2.2 mil. for 13 locations from the bankrupt Mervyn’s department-store chain for $2.2 million to serve as new Forever 21 locations.

“We have always grown at a rapid pace because that is one of the challenges I set for myself,” says Chang. “We hope to keep up the pace of growth in the future.”

Former Forever 21 factory workers say the fast growth has been powered in part by a sweatshop culture. In September 2001 19 employees sued for unpaid wages, mandatory unpaid overtime, 12-15 hour days and compulsory weekend shifts. In March 2004 an undisclosed settlement was announced.

The source of the Changs’ unshakeable faith is no secret. On the bottom of every Forever 21 shopping bag is John 3:16, a popular bible passage that reads, “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” Jin Chang is known to attend church every morning at five.

“People join their church just to get close to them,” a garment district insider says of the Changs. Jin is known to “pluck” young designers out of the companies she’s working with, “and if they’re Christian and religious, she puts them in business,” he explains. And for some, it seems to have been a true blessing. Rowena Rodriguez, a mid-thirties fashion consultant and one-time “unbeliever” was born again with Jin’s help. “In the short time I worked with Mrs. Chang, my life was transformed, and I accepted Jesus Christ as my Lord and Savior.” When asked the secret to the Changs’ success, Rodriguez exclaims: “The Changs love Jesus!”

The Changs attribute their success to a lot of hard work and a frugal corporate culture. A high degree of personal privacy may be one more condition. While Forever 21 courts hype, the family is determinedly low-key. The internet turns up very few photos on the couple. The Changs live with their two daughters, Linda and Esther, who attend church with them every Sunday.

This year’s Forbes powerful women list was topped by German Chancellor Angela Merkel followed by U.S. Secretary of State Hillary Clinton in second place and Brazilian President Dilma Rousseff in third. PepsiCo Chief Executive Indra Nooyi, No. 4, is the highest ranked female CEO.

Facebook COO Sheryl Sandberg jumped to fifth from 66th last year, while Michelle Obama was dropped from first to eighth, presumably reflecting the diminished popularity of the U.S. President due to the perception that the economic recovery has slowed.

First Lady Michelle Obama, wife of U.S. President Barack Obama, dropped from first to eighth this year. And Christine Lagarde, the recently installed managing director of the IMF, placed ninth.

The list also included six women of Chinese ancestry.

Cher Wang, chairwoman of Taiwanese smartphone maker HTC, ranks 20th. She is the daughter of the late billionaire YC Wang, the founder of Formosa Plastics. HTC is now the world’s fifth largest smartphone maker.

At No. 33 is Chan Laiwa, chairwoman and founder of Hong Kong-based Fu Wah International Group, a top Beijing commercial property developer. Chan founded the China Red Sandalwood Museum in 1999, the largest private museum of its kind.

Zhang Xin, CEO of Soho China, Beijing’s top property developer, is ranked 48th. Zhang and her husband founded the company in 1995. Zhang plays a key role in running Sina Weibo and founded the charity Soho China Foundation in 2005.

Chinese American Andrea Jung is ranked 64th. Jung sits on Apple’s board of directors. Jung has been Avon’s CEO for 12 years, and has become known as a champion of women’s empowerment, partly because Avon reps are 95% women, many of whom are the primary support of their families.

At No. 68 is Margaret Chan, director-general of the World Health Organization (WHO). Chan was the first woman to lead Hong Kong’s Department of Health. She has been nominated to head up WHO for a second term.

Ho Ching, wife of Singapore Prime Minister Lee Hsien Loong, is ranked 72th. She has been CEO of national investment house Temasek since 2004.