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Almost a month after popular fast fashion brand Forever 21 began liquidation sales at US locations, the retailer officially filed for a second bankruptcy in nearly six years, and announced at the end of Sunday it would “entangle” its US business.
All locations are beginning to sell their businesses, and with their website, normal operation and sales continue as they begin as the official take-up process begins.
“We evaluated all options to best position all of the options for the future, but considering our competition with foreign first fashion companies, we were unable to find a sustainable path.
Out-of-business sales began in mid-February at 236 locations (“Wave 1 location”). These locations will close for the week of March 30th. The remaining 118 locations (“Wave 2 locations) will be closed by May 1st.
Gift cards will continue to be awarded until April 15th.
Popular clothing store chain cuts hundreds of workers and closes locations
At that height, Forever 21 operates at least 800 locations worldwide, boasting $4 billion in sales per year and employs 43,000 people. However, after the initial bankruptcy filing in 2019, that number plummeted to 500 locations worldwide. If the company cannot find a buyer within the next few weeks, the remaining 354 US locations will permanently close their doors.
As of January 2024, California had 21 Forever stores more than any other state.
International locations, along with international e-commerce businesses, are not affected by bankruptcy filings.
According to court documents, the company has liabilities of approximately $1.6 billion and reported that as of March 16, its assets are valued at an estimated $100 million to $500 million.
Shoppers will leave 21 stores forever in Los Angeles County shopping malls on September 30, 2019. (Credit: Frederick J. Brown/AFP/Getty Images)
“On behalf of the company, I would like to express my deep gratitude to the dedicated employees for their efforts and commitment to their customers,” Sel said. “We are also grateful for the long-standing support from our partners and loyal customers. They have been able to serve as a fashion industry leader and a go-to retailer for generations.”
The Los Angeles-based company was founded in 1984 as a 900-square-foot store in California, and from the late 1980s to the 1990s the company quickly expanded throughout the United States before entering the international market.
During this growing season, forever 21 evolved from small storefronts to names recognised in “fast fashion,” attracting a diverse customer base with trendy, affordable clothing and rapidly changing inventory.
According to court documents, the company cited the struggle related to the historic increase in inflation that began in 2021.
The company’s most notable online competitors include Temu and Shein. Temu and Shein use the “De Minimis Exemption” to exempt products under $800 from import operations and customs duties, and receive a large discount on product prices. However, retailers will have to pay these fees, which means they are more expensive in comparison.
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