Hey, I'm Dan! I invest in early-stage startups at Madrona and write the DL, a weekly newsletter about tech in the PNW

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A tale of two retailers 🛍️

The New York Times had a fascinating pair of stories about family-run retailers this week - one about Nordstrom and one about Forever 21. There are a bunch of great stories and anecdotes in both, so go read them!

But in case you don’t have time, here are some of the highlights:

Forever 21

  • The Chang family immigrated to the US from South Korea in 1981 and started Forever 21 in 1984
  • Do Won and Jin Sook are the husband and wife cofounders, and their daughters are both executives at the company
  • At its peak, Forever 21 reached $4B+ in annual sales
  • The Changs never took any investment and own 99% of the company
  • Last month, Forever 21 filed for bankruptcy
  • As the business expanded, the Changs hired experts to run parts of the business but then distrusted and ignored their recommendations
  • The problems that led to bankruptcy were long-term leases for massive stores, unprofitable international expansion, and merchandising errors
  • Through the bankruptcy, the company will be expanding the board and hiring new executives, cutting costs, and expanding ecommerce sales


  • In the 90s, Nordstrom was struggling. Then, Blake Nordstrom took over in 2000, guided the company back to its core value of customer service, and the company began to grow again
  • Today, Nordstrom is run by Peter and Erik Nordstrom, who are the fourth generation of Nordstroms to run the company
  • Nordstrom has done well with “onmichannel” retail – a third of its sales are online, and financial analysts see their new “Nordstrom Local” stores as the future of the business
  • This month, Nordstrom also opened a $500M-$1B New York flagship store (estimated) as a big bet on the future of physical retail
  • In recent years, Nordstrom has hired its first Chief Merchandising Officer, a VP of Creative Projects, and a VP of Men’s Fashion, and they believe these folks are the future of the company
  • Peter and Erik think they’ll be the last generation of Nordstroms to run the company and are ready to hand over the reins to new leaders

After reading these articles, I did some more research on family-run businesses, so here are some closing stats from BCG and Credit Suisse on how important family businesses are to the global economy:

  • 33% of US companies with $1B+ in revenue are family-run businesses
  • In Italy, the Agnelli family controls 10.4% of the Italian stock market. In Hong Kong, 15 families control assets worth 84% of GDP
  • Family-owned firms outperform the broader equity markets in all regions and sectors by 4% per year
  • Only 12% of family firms make it to a 3rd generation

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