Late Sunday night, Forever 21 announced what many in the retail industry had been expecting for weeks: The fast-fashion giant would be filing for Chapter 11 bankruptcy. The news was first reported by the New York Times.
“This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21,” Linda Chang, Executive Vice President of Forever 21 (and daughter of the company’s founders, Do Won and Jin Sook Chang), said in a statement.
As part of this restructuring, Forever 21 revealed it “plans to exit most of its international locations in Asia and Europe, but will continue operations in Mexico and Latin America,” per a press release. In the filing, the company requested approval to close up to 350 stores globally, with as many as 178 being in the U.S. Its e-commerce operation will go on as usual, though.
As to which U.S. locations will be closing, a spokesperson for Forever 21 told Glamour: “The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords. We do, however, expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the U.S.”
According to the Times, Forever21’s sales were down to $3.3 billion in 2018, from $4.4 billion in 2016. The company has also suffered from some bad PR in recent months: It was on the receiving end of a lawsuit from Ariana Grande, and was criticized for sending diet bars along with plus-size orders. Forever 21 joins Barneys and Charlotte Russe on the list of once-mainstay retailers that have filed for bankruptcy protections in 2019.
