Forever 21 goes bankrupt.

Famous American fashion brand, Forever 21, has gone bankrupt for the second time in less than six years. The first bankruptcy took place in 2019, where the company shut hundreds of stores and was purchased by a new owner in 2020. Since then, the store has struggled to maintain its physical presence when up against online retailers in the likes of Shein, Temu and Amazon. 

The company’s owner, F21 OpCo, announced that it will close the business under Chapter 11 bankruptcy protection which will see all of its 200 US stores close. This could be prevented if a buyer swoops in and purchases the brand last minute. 

There have been rumours that the company will continue to exist online within the US, and will continue existing physically internationally.

The brand, which was founded in Los Angeles in 1984, started originally as Fashion 21 and expanded internationally to host over 800 locations worldwide and $4 billion (£3.1 billion) in sales. At its prime, Forever 21 employed over 43,000 employees. 

F21 OpCo’s finance chief, Brad Sell,  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.’ 

Closing down sales have already started in 236 ‘Wave 1’ locations, with the intention for these to be shut within the week of March 30th. These were the stores with the worst performing sales records. These are not likely to attract any buyers. ‘Wave 2’ stores, however, take up 118 locations, are due to close down before May the 1st, and, therefore, have longer to be purchased.