Fashion retailer Forever 21 has filed for bankruptcy for the second time in six years, citing dwindling foot traffic and increased competition from online retailers like Amazon, Shein, and Temu. The company’s US operating company, F21 OpCo, filed for Chapter 11 bankruptcy protection on Sunday, with estimated assets ranging from $100 million to $500 million.
Forever 21 had around 800 stores globally in 2016 but has since seen its business decline, leading to the closure of over 150 stores during its first bankruptcy in 2019. The company’s remaining 350 US stores will remain open and continue serving customers, while international stores remain unaffected.
The bankruptcy filing comes as part of a court-supervised sale and marketing process for some or all of Forever 21’s assets. Liquidation sales are expected to begin, with the retailer planning to close at least 200 of its remaining locations. Forever 21’s trademark and intellectual property are owned by Authentic Brands, which will continue to control the brand.
Despite the challenges faced by Forever 21, Authentic Brands CEO Jamie Salter has expressed optimism about the brand’s future, stating that it is adapting to changing retail trends. The company’s global president, Jarrod Weber, said that the bankruptcy filing presents an opportunity to modernize the brand’s distribution model and set it up for success in the fast fashion market.
Forever 21’s second bankruptcy marks a significant blow to its business, which has struggled to keep pace with the rise of online shopping. The retailer’s failure to adapt to changing consumer habits has led to declining sales and a decline in its market share.
Source: https://www.foxbusiness.com/economy/retailer-forever-21-files-bankruptcy-second-time-6-years