Popular fast fashion clothing brand Forever 21 has filed for bankruptcy and is set to close all 354 of its remaining stores in the US.
F21 OpCo, which runs the stores, announced that its American locations and website be ‘winding down’ amid Chapter 11 bankruptcy protection. It is its second bankruptcy filing in nearly six years.
The operator brand that started in 1984 attributed the decision in part to competition from online retailers like Shein, Temu and Amazon.
‘While we have evaluated all options to best position the company for the future, we have been unable to find a sustainable path forward, given competition from foreign fast fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin,’ stated F21 OpCo’s chief financial officer Brad Sell.
‘On behalf of the Company, I’d like to express our deep appreciation for the hard work of our dedicated employees and their commitment to our customers.’
All Forever 21 stores are holding going-out-of-business sales to clear inventory.
The sales started in mid-February at 236 ‘Wave 1 locations’ which were the worst performing, and they are set to close the week of March 30. The remaining 118 ‘Wave 2 locations’ are expected to shutter before May 1.
F21 OpCo is working to see if it can salvage the brand with a partner, or if it can sell some of its assets or all of them. The Wave 1 locations are not expected to attract potential buyers.
Forever 21 began in a 900-square-foot store in Los Angeles called fashion 21. It quickly expanded in the late 1980s and 1990s even as online shopping started becoming popular. It also expanded internationally.
It operated more than 800 locations worldwide and had $4billion in sales and 43,000 employees in its heyday.
‘We are also grateful for the many years of support from our partners and our loyal customers, who have allowed us to serve as a fashion industry leader and go-to retailer for generations,’ Sell said.
Store locations and its websites abroad will continue running.
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