Forever 21 Files For Bankruptcy In The United States.
Forever 21 is one step closer to closing its doors in the US after its operating company filed for bankruptcy protection. Despite the filing, the company announced that its US stores and website will remain operational as it begins winding down its operations.
Once a favorite among young women globally, Forever 21 has struggled to attract customers amid rising prices and the increasing dominance of online shopping. The company first filed for bankruptcy protection in 2019 but was later acquired by a group of investors through a joint venture.
"We have been unable to find a sustainable path forward, given competition from foreign fast-fashion companies... as well as rising costs, economic challenges impacting our core customers," said Brad Sell, the company's chief financial officer.
The company will conduct liquidation sales at its stores and will sell some or all of its assets through a court-supervised process. If a sale is successful, the company may shift away from a full wind-down of operations, the firm stated.
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Chapter 11 protection allows a US company to delay its obligations to creditors, giving it time to reorganize its debts or sell portions of the business. However, Forever 21’s operations outside the US, managed by different license holders, will not be impacted by the bankruptcy filing.
Founded in 1984 in Los Angeles by South Korean immigrants, Forever 21 became known for its affordable, trendy clothes and accessories, quickly rising to compete with global fast-fashion giants like Zara and H&M. At its peak in 2016, the retailer boasted 800 stores worldwide, 500 of which were in the US.
The potential closure of Forever 21 in the US marks the end of an era for the iconic fast-fashion brand. Once a beloved shopping destination for millions, its decline reflects broader shifts in the retail industry, where competition from online stores and rising costs have taken a heavy toll. It's a sad moment for both fans and employees, as the once-thriving brand struggles to survive in an increasingly challenging market.
