Los Angeles-based fashion retailer Forever 21 signed an agreement Tuesday to open a flagship store in Beijing, part of a greater plan by the company to expand into the world’s largest emerging consumer market.
In a ceremony attended by Los Angeles Mayor Antonio Villaraigosa, the clothing maker committed to a 24,000-square-foot retail space in a multi-story mall located in the Chinese capital's central shopping district, Wangfujing.
Additional stores are set to open in Shanghai and Hong Kong. The brand briefly operated a store in Changshu, a city 70 miles from downtown Shanghai, but it closed two years ago because of poor sales.
Famous for churning out staggering numbers of new styles in record time, Forever 21 follows other mid-market fashion brands from abroad -- such as H&M, Zara, Uniqlo and the Gap -- into the Chinese market.
"The action and money is here," said Sung Won Sohn, the company's vice chairman. "China is the only locomotive left in the world."
China's retail sales grew 17.2% in October from a year ago, to $262.6 billion.
Sohn, who is also an oft-cited economist at Cal State Channel Islands, acknowledged the company's investment comes at a time when China could see a considerable economic slowdown. Exports are declining, and the property market has been stung by government restrictions.
"There's growing potential for a real estate bust," said Sohn, whose dark suit and white shirt contrasted with the brand's lively casual wear, known for wild prints and revealing cuts. (The person at the ceremony who appeared to be making the most effort to look fashionable was Villaraigosa's girlfriend, Lu Parker, who paired black knee-high boots with faux snakeskin pants and a black blazer).
But Sohn remained bullish on Chinese consumers, explaining that affordable brands such as Forever 21 tend to do well during recessions.
However, Sohn said, like most foreign retailers, Forever 21 clothing will be priced slightly higher in China than in the U.S. This comes despite lower Chinese household incomes and the fact that 60% of the brand's clothing is manufactured in the country.
But some things will remain the same. Sohn said the family-owned company had no plans to scrap printing Bible verses on its yellow shopping bags just for China, a country where religious worship remains muted and generally under the purview of the government.
"We have them in Birmingham, England, too, where there's a huge Muslim community," Sohn said of the biblical references. "I don't think that will change."
Speaking on stage at the event, Villaraigosa said Forever 21's Korean-immigrant roots embodied the story of L.A.
"Forever 21 is an L.A. fashion company we are very proud of," he said.
The mayor is on an 11-day Asian trade mission that is also scheduled to take him to Japan and South Korea.
On Monday, he met with the head of China's sovereign wealth fund, Lou Jiwei, who expressed interest in investing in L.A.'s public infrastructure -- possibly through the Metropolitan Transit Authority, Villaraigosa said.
The mayor didn't elaborate. He was in a hurry to remove specks of glittery confetti that had rained on attendees at the end of the ceremony –- lest he look too festive in his meetings that afternoon with Chinese Vice Premier Wang Qishan and Vice President Xi Jinping, a man pegged to become the next president of China.
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-- David Pierson in Beijing
Photo: Los Angeles Mayor Antonio Villaraigosa, center, raises a glass marking an agreement Tuesday to open a Forever 21 store in a Beijing shopping mall. Sung Won Sohn, the fashion retailer's vice chairman, stands to the mayor's left. Credit: David Pierson / Los Angeles Times