Forever 21 is one step closer to shutting down operations in the US after the brand’s operator filed for bankruptcy protection.
The company said in a statement that U.S. stores and websites will remain open as they “start the rewind process.”
Forever 21 was once a favorite of young women around the world, but with prices rising and online shopping becoming more popular, they have struggled to attract customers to their stores.
The company first filed for bankruptcy protection in 2019, but the group of investors ultimately ended up purchasing it through a joint venture.
“We have not been able to find a sustainable path given the rising costs and the economic challenges affecting our core customers, given the competition from foreign first fashion companies,” Brad Sel said in a statement.
The company said it will carry out liquidation sales in its stores and some or all of its assets will be sold under the court’s supervision process.
“If sales are successful, the company can leave its entire operation,” the company’s statement said.
Chapter 11 Protection defers US companies’ obligations to creditors, giving them time to restructure their obligations and sell parts of their businesses.
Forever 21 shops and non-US e-commerce platforms are operated by other license holders and are not affected by bankruptcy protection filings.
Fast fashion retailer was founded in Los Angeles in 1984 by Korean immigrants.
Its cheap, trendy clothing and accessories have become increasingly popular among young people over the next decades, and the brand has become a contestant for first fashion giants such as Zara and H&M.
At its peak in 2016, there were 800 Forever 21 shops all over the world, of which 500 were in the US.
