As cheap and fashion-forward retailer Forever 21’s stores grow in size and number, so do the company’s legal woes.
The Los Angeles-based chain is due to open a 90,000-square-foot store in Times Square in 2010. A new 80,000-square-foot store is slated to open in an Los Angeles-area mall later this year, and the retailer opened a comparatively modest 19,000-square-foot store
in the Harajuku neighborhood of Tokyo -- their first in Japan, last April.
But the company has been hit with over 50 lawsuits in recent years, mostly from other designers who charge that the company has copied their pieces, down to the smallest details. Companies such as Express, Anthropologie, Anna Sui, Diane von Furstenberg, and Bebe
(BEBE) have filed complaints, but most are settled out of court.
There was a notable exception: another Los Angeles-based apparel firm, Trovata, took Forever 21 to jury trial
for allegedly copying seven pieces. The suit was based on trade dress protection, which differs from copyright protection in that it protects what's called “secondary meaning," like logos or details that become a company’s calling card and associated with a brand in the public’s mind (think of Ralph Lauren’s
(RL) polo player).
The case went to court in May, but was declared a mistrial. Just before a second jury trial set for early October began, the two companies settled.
Susan Scafidi, visiting professor of law at Brooklyn Law School where she teaches fashion law, says that Forever 21 seems to be committed to their particular technique. “It appears Forever 21 is just treating lawsuits as a cost of doing business,” says Scafidi. “It’s worth it for them to pay up when they get challenged for copying and they seem to prefer to do that rather than to seek a license in advance.”
The private company was founded in 1984 as Fashion 21 by husband and wife Jin Sook Chang and Do Won Chang. It's since expanded to over 430 stores, the majority of which are mall-based, and 2008 sales of $1.3 billion.
But unoriginality isn’t the company’s only problem. A 2001 lawsuit, the subject of the 2007 documentary Made in LA
, was brought by garment workers who claimed the working conditions at sweatshops to which Forever 21 subcontracted out their production were unhealthy and unsafe. The case went to the state level until it, too, was settled in December 2004.
Now the clothing maker is embroiled over a land dispute: A community garden in south central Los Angeles -- established after the 1992 LA riots and at 14 acres, the largest community garden in the country -- was bulldozed in June 2006 by a developer planning to build a large Forever 21 warehouse facility. The subject of Academy Award-nominated documentary The Garden
, the controversial bull-dozing meant that the local residents not only lost their access to fresh vegetables, they’ll also be exposed to an estimated 2,581 daily diesel truck trips to and from the warehouse once it’s finally built, according to an organization known as the South Central Farmers
. The acreage is currently empty.
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