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Forever 21 Fades to Black: Retailer Likely Shuttering US Operations
Once a teen fashion empire, Forever 21 appears to be on its last legs in the US. The company’s operating group has filed for bankruptcy protection, signaling a potential end to its stateside presence.
While the company insists US stores and its website will remain open for now, the bankruptcy filing indicates a “winding down” process is underway. The once-popular retailer, known for its trendy, affordable clothing, has struggled in recent years against fierce competition from other fast-fashion brands and the rise of online shopping. This isn’t the company’s first brush with bankruptcy; a similar situation occurred in 2019, resulting in a buyout by a group of investors.
Citing insurmountable challenges like rising costs, competition from overseas fast-fashion companies, and economic pressures on its core customer base, Forever 21’s chief financial officer, Brad Sell, admitted the company has been unable to find a “sustainable path forward.” Liquidation sales are planned, and company assets will likely be sold under court supervision. However, a glimmer of hope remains: a successful sale could potentially avert a complete shutdown.
Forever 21’s international operations, managed by separate license holders, will remain unaffected. Founded in 1984 by South Korean immigrants in Los Angeles, the brand rose to prominence as a fast-fashion giant, boasting 800 stores globally—500 in the US—at its peak in 2016. Now, the future of Forever 21 in the US hangs in the balance.