Forever 21 has filed for bankruptcy for the second time in six years.
On Sunday, March 16, Brad Sell, chief financial officer of F21 OpCo, said in a news release, “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, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends.”
The operating company currently has $1.58 billion in outstanding loans and owes over $100 million to numerous clothing manufacturers, mainly in China and Korea.
Learn more about the longtime business and what’s next below.
How Long Has Forever 21 Been in Business?
Forever 21 was founded in 1984 in Los Angeles by South Korean immigrants. Before facing intense competition from fast-fashion e-tailers like Shein and Temu, it was a popular destination for young shoppers seeking stylish yet affordable clothing. At its peak, the company employed 43,000 people and generated over $4 billion in annual sales.
Is Forever 21 Closing?
The company announced it will begin winding down its U.S. operations while seeking a potential buyer for its remaining assets. According to local reports, Forever 21 has started closing stores in several states, including Connecticut, California, Washington, Pennsylvania, Idaho, and North Dakota. Last month, the company revealed plans to lay off about 358 employees and close its headquarters in Los Angeles, California.
“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,” Sell added in the release. “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.”
While the U.S. business is set to liquidate, the Forever 21 brand name will continue under the ownership of Authentic Brands Group.
Jarrod Weber, global president of lifestyle at Authentic Brands, stated on March 17, “Forever 21 is one of the most recognizable names in fast fashion. It is a global brand rooted in the U.S. with a strong future ahead. Retail is changing, and like many brands, Forever 21 is adapting to create the right balance across stores, e-commerce and wholesale.”
Weber further explained that the restructuring of the U.S. operations will not affect Forever 21’s intellectual property or international business. He sees the move as an opportunity to modernize the brand’s distribution model, making it more competitive in the fast fashion industry for the long term.
