Forever 21 to close its US operations after filing for bankruptcy

Business

Credits: Image: Forever 21 by FashionUnited

Forever 21, once a dominant force in fast-fashion retail, is set to permanently close all of its US stores after filing for bankruptcy for the second time, Reuters reports.

Forever 21 stores outside the United States are not involved in this case.

The company’s US operations cited several factors behind the closure, including intense competition from global fast-fashion brands, rising operational costs, economic pressures, and shifting consumer preferences. Despite the filing, the company’s US stores and website will remain open temporarily as it winds down operations and seeks potential buyers for its assets. Earlier, media outlets had already reported that Forever 21 would liquidate its retail network of approximately 350 stores if no buyer was found.

Now, it appears a liquidation is in the pipeline: “Forever 21 is now planning a liquidation sale of its stores as it goes through a court-supervised sale and marketing process for some or all of its assets. The company’s U.S. stores and website will remain open and continue to serve customers. Its international stores will remain unaffected,” the company said, according to Reuters.

'Unable to find a sustainable path forward'

Brad Sell, Chief Financial Officer at F21 OpCo, continued: “We have been unable to find a sustainable path forward given competition from foreign fast fashion companies, who were able to take advantage of the de minimis exemption to undercut our brand on pricing and margin, as well as rising costs, economic challenges affecting our core customers and changing consumer trends.”

Previously in 2019 Forever 21 filed for bankruptcy the first time, which resulted in the closure of several locations and a withdrawal from the Japanese, EU and UK markets. The company was later acquired by Authentic Brands Group, Simon Property Group and Brookfield Property Group, who together aimed to emphasize the retailers’ Gen Z customers, as well as speed to market and a sustainable supply chain.

Founded in California in 1984 by Korean immigrants Jin Sook and Do Won "Don" Chang, Forever 21 quickly rose to prominence, reaching $1 billion in annual sales by 2005. The retailer became a mall favorite for millennials seeking affordable, trendy fashion. At its peak, Forever 21's sales topped $4 billion.

This article was translated to English using an AI tool.

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