Forever 21 files for bankruptcy in the US again
The company said it would conduct liquidation sales at its stores and that it was seeking a buyer for some or all of its assets.
Forever 21 isn't even cool enough to exist anymore.
The retailer's US operating company filed for bankruptcy Sunday - for the second time in six years - in a court in Delaware, citing fierce competition from foreign fast fashion retailers. It marks the end of an era for a clothing brand that introduced many teens to fast fashion.
The company said in a statement that its "stores and website in the United States will remain open and continue serving customers" as it implements an "orderly wind-down" of its business in the country. It added that it would conduct liquidation sales at its stores and that it was seeking a buyer for some or all of its assets.
Brad Sell, the company's chief financial officer, said in the statement: "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 and evolving consumer trends."
Forever 21 has been unable to keep up with Chinese e-commerce giants such as Shein and Temu, especially as online shopping boomed during the Covid-19 pandemic. The company is also sensitive to President Donald Trump's tariff hikes on Chinese imports into the United States.
Forever 21 first filed for Chapter 11 bankruptcy in 2019 and subsequently shut down 200 stores. A few months later, a team consisting of mall operators Simon Property Group and Brookfield Properties and brand management firm Authentic Brands Group bought Forever 21 for $81 million. That allowed the retailer to keep operating with a smaller retail footprint.
But years later, the outlook remained bleak.
Forever 21 joins a long list of companies closing stores in the US. Last year, major US retailers announced more than 7,300 store closures, up 57% from 2023, according to Coresight Research. These included Walgreens (WBA) and CVS (CVS).
Forever 21 currently has more than "540 locations globally and online," according to its website. At the time of its first bankruptcy filing, it had 800 locations worldwide.
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