Forever 21, the popular fast-fashion retailer, has initiated a voluntary Chapter 11 process with the support of its lenders. The company aims to implement an orderly wind-down of its US operations while continuing to explore potential sales or going-concern transactions.
As part of the plan, Forever 21’s US stores and website will remain open to serve customers as the company begins its winding down process. International stores operated by other licensees will continue to operate unaffected. The company has filed motions with the court seeking relief for employee wages, benefits, and operational funding through the Chapter 11 process.
Forever 21’s struggles are attributed to increased competition from foreign fast-fashion companies that have successfully undercut prices and margins. Rising costs, economic challenges, and evolving consumer trends have also impacted the brand. The company’s Chief Financial Officer stated that they will work diligently to minimize the impact on employees, customers, vendors, and other stakeholders.
The Chapter 11 process provides an opportunity for Forever 21 to explore new paths forward, including a potential sale of assets or a going-concern transaction. The company believes this dual-path approach will maximize optionality and value.
Source: https://www.businesswire.com/news/home/20250316125020/en/F21-OpCo-LLC-Initiates-Voluntary-Chapter-11-Process-With-Support-of-Its-Lenders