Beloved sports fashion retailers Billabong, Quiksilver, and Volcom aren’t the only U.S. retailers to shut their doors this year. Forever 21 joins this unfortunate group of closures after filing for Chapter 11 bankruptcy. Sadly, this means the end of all U.S. store locations.
Mall rats now have one less place to buy a last-minute “going out top.” The fast fashion trends beloved by 2000s teens are ending as Forever 21 plans to liquidate sales across more than 300 U.S. stores. Sources say stores will begin liquidating immediately.
Over the past three years, Forever 21 has lost more than $400 million, pushing its debt to a staggering $1.58 billion. Plus, last month, the company disclosed its plans to lay off about 358 employees and shut down its headquarters in Los Angeles. But at its peak, the retailer employed 43,000 people and generated more than $4 billion in annual sales.
A Second Brush with Bankruptcy
Unfortunately, this isn’t the company’s first bankruptcy filing. Sunday’s filing marks the second time in six years that the retailer has sought bankruptcy protection.
However, when the company first filed in 2019, Sparc Group managed to keep it afloat through a joint venture with Authentic Brands Group, Simon Property (SPG.N), and Brookfield Asset Management (BAM.TO).
Brad Sell, finance chief at the company that operates Forever 21’s U.S. stores, stated, “We’ve 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.”
What’s next for Forever 21?
For the time being, stores and the company’s U.S. website will remain open as Forever 21 starts winding down operations. And the retailer is still seeking a last-minute buyer for its remaining assets. While no official going-out-of-business sales have been announced, the brand is currently offering major discounts — up to 80% off sitewide and up to 70% off select styles online.
There’s good news for international fashionistas – Forever 21’s international stores will remain unaffected. But it’s truly the end of an era for fashion lovers in the United States.