Forever 21 caught in Obamacare controversy

The clothing chain says cutting its workers' hours isn't tied to the new law, but that's not stopping critics and supporters from weighing in.

By Aimee Picchi Aug 19, 2013 1:19PM

File photo of a Forever 21 store (© Ben Nelms/Bloomberg via Getty Images)If you like your cropped T-shirts to come with a dose of Obamacare controversy, look no further than retailer Forever 21


The apparel seller is the latest business to find itself embroiled in an Obamacare minefield, with consumers accusing the chain of slashing worker hours as a way to avoid paying benefits under the new health care insurance law. 


But Forever 21 is denying its decision to cut hours is related to the overhaul, writing on Facebook that the cutbacks are "based on projected store sales, completely independent of the Affordable Care Act." Obamacare will go into effect in 2014, although the government has delayed the mandate that employers provide coverage to full-time employees until 2015. 


For Forever 21, the furor started after the company said it would cut hours of some full-time employees to a maximum of 29.5 hours a week, just under the 30-hour week that qualifies workers as full-time under Obamacare, The Huffington Post notes. It's not clear how many of the chain's 30,000 employees that move will affect, although Forever 21 said it was "less than 1%."


Some consumers weren't convinced by the denial. 


"Expected sales says everyone should go to 29.5 hours? I guess we will all pick up the tab for their healthcare (emergency rooms) and their food (food stamps)," one consumer wrote on Forever 21's Facebook page. 


Cuts to employee hours would suggest that some stores are seeing slower sales, although Forever 21 is a private company and doesn't disclose its results. But the company has experienced astounding growth during the past few years. In a September interview with CNN, founder Do Won Chang said his company was on track to report $4 billion in 2012 sales. Sales were $2.3 billion in 2009, according to The Wall Street Journal. 


While some customers voiced displeasure and vowed to stop shopping at the chain, others offered support, and some pointed fingers at the health care overhaul.


"Forever 21, don't listen to these people," one supporter wrote. "They're completely ignorant of how to run a business."


The chain, which prints a Bible verse on the bottom of its shopping bags, is just the latest retailer to cut worker hours ahead of the ACA's implementation. Regal Entertainment Group (RGC) saw a similar customer backlash in April after it announced it was cutting hours to avoid providing coverage under the law. 


Still, there's not much statistical evidence that companies are planning cutbacks in response to the ACA, although anecdotes abound. Franchisees for companies such as Subway and other fast-food companies are also planning to reduce hours, NBC News reported earlier this month. 


Loren Goodridge, who owns 21 Subway franchises, told NBC News, "To tell somebody that you've got to decrease their hours because of a law passed in Washington is very frustrating to me. I know the impact I'm having on some of my employees."


Follow Aimee Picchi on Twitter at @aimeepicchi.


More on moneyNOW

1024Comments
Aug 19, 2013 2:20PM
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Obama-Care = Death to the U.S. economy
Aug 19, 2013 1:52PM
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To not cut hours would be un irresponsible business decision.  You can't increase the cost of your 2nd largest expenditure by ar least 30% and not expect it to hurt your business significantly.

 

Business will drop anyway since most of your customers hours are going to be cut for the same reason.

 

There is nothing good about this.

Aug 19, 2013 3:19PM
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A little side note - I was just informed that as of January 1, we will be charged  "ACA" fees and taxes to our group plan, making an already high premium even higher. My employer said as of Jan 1, he will be cancelling the insurance.  It just gets better and better.
Aug 19, 2013 3:51PM
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It's not Obamacare-----Obama don't care is what it should be called

Aug 19, 2013 2:15PM
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Forever a livestock voter. You animals raised for a vote are getting just what you voted for.
Aug 19, 2013 3:24PM
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Liberals are so f'in stupid that they think laws are written in a vacuum and are completely baffled when business out smarts them.
Aug 19, 2013 1:47PM
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looks like obamacare is the black swan that hits the economy.
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Some of the Democrats on Capital Hill are not as narcissistic as the President to think ACA is perfect.   Get rid of it and get in something that won't kill Capitalism in America.  ACA is in shambles.  Take the hit Mr. President and go on.   We would be better for it.

Aug 19, 2013 1:39PM
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 lol.  so are liberal women going to stop shopping here now?  are liberals going to ever admit that obamacare is bad for the usa and bad for the businesses here?

 

all businesses are going to get rid of full time work.  its inevitable as long as obamacare is still the law.

 

so add forever 21 to the list along with papa johns, wendys, wal-mart. 

 

is forever 21 going to be condemned by liberals even though its run by liberals?  are liberal women going to claim they will stop shopping at this liberal greedy corporation that makes billions a year?

Aug 19, 2013 4:54PM
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Got news for ya, a LOT of employers are doing this, big and small...way to go Obamacare!
Aug 19, 2013 1:43PM
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forever 21 makes billions of dollars a year and is run by liberals.

 

typical rich greedy liberals.  proof that liberals dont care about the working class

Aug 19, 2013 3:23PM
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THIS IS WHAT OBAMA AND PROGRESSIVE DEMOCRATS WAS PUSHING FOR! THEY DID THIS

TO FAIL AND COMPANIES TO DUMP EVERYBODY FOR SINGLE PAYER DEATH CARE! I JUST

HEARD NEW YORK TIMES IS EXPOSING ALL THE LEFT WING RICH LIBERALS FOR THE LIES

AND HYPOCRISY WHERE THEY ARE ONLY ABOUT HELPING PEOPLE BUT THEY ARE ALL

INVOLVED IN MONEY MAKING FAKE CHARITIES WHERE THEY ARE RAKING IN MILLIONS!

THE CLINTONS MADE 17 MILLION LAST YEAR FROM THEIR SO CALLED CHARITIES!

Aug 19, 2013 4:50PM
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IRONIC, they voted for Obama and backed him but now have cut hours to 29.5....
Aug 19, 2013 4:56PM
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The way healthcare is now 99% of people will go broke with one illness.
Aug 19, 2013 2:01PM
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wait, where are the liberals responding with how forever 21 should just raise their prices to pay for the healthcare?

 

where are the liberals responding with forever 21 makes billions and could easily afford to take the loss?

 

proof that rich greedy liberal corporations only care about profits and not the working class

Aug 19, 2013 2:30PM
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 30-hour week that qualifies workers as full-time under Obamacare--- I worked retail and 30 hours was always considered full-time and eligible for benefits. This is not new, I think most retailers prefer to hire part-time 20 hours or less for floor workers. Only Sups and Managers got the 30+.
Aug 19, 2013 4:57PM
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It's funny.  They voted for it.  They got it.  Then, when reality sets in of exactly what that means, they blame the company for doing what the company needs to do.

Hey Nancy Pelosi-

Maybe next time, we should read the bill BEFORE voting on it, so "we can find out what is in it"...

Aug 19, 2013 3:56PM
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I hope this leads to getting basic healthcare OFF the backs of ALL of our companies and Gov..  That is an old structure that no longer works. Legacy costs and healthcare kill our companies and the taxpayer.
Companies should do workmans comp and short term disability due to being hurt on the job. Basic healthcare should be done on the open market, just like your car insurance.
Aug 19, 2013 1:42PM
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Score......... Businesses   21                                                                                                                      ....................Employees     0

Again

Aug 19, 2013 4:56PM
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Many business will do the same..................Thank you Obama for destroying this great country, I hope you get impeached

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