New York City, NY, USA - December 4, 2014: View of Forever 21 storefront in Times Square, NYC. Pedestrians and tourists on street outside front entrance.
Pedestrians and tourists on the street outside the front entrance of Forever 21 in Times Square, New York City (Picture: Getty Images)
Popular fast fashion clothing brand Forever 21 has filed for bankruptcy and is set to close all 354 of its remaining stores in the US.
F21 OpCo, which runs the stores, announced that its American locations and website be ‘winding down’ amid Chapter 11 bankruptcy protection. It is its second bankruptcy filing in nearly six years.
The operator brand that started in 1984 attributed the decision in part to competition from online retailers like Shein, Temu and Amazon.
‘While we have evaluated all options to best position the company for the future, we have 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,’ stated F21 OpCo’s chief financial officer Brad Sell.
SANTA MONICA, CA/USA - APRIL 18, 2019: Forever 21 retail store exterior and trademark logo.
Forever 21 is closing all remaining US locations in two waves (Picture: Getty Images)
‘On behalf of the Company, I’d like to express our deep appreciation for the hard work of our dedicated employees and their commitment to our customers.’
All Forever 21 stores are holding going-out-of-business sales to clear inventory.
The sales started in mid-February at 236 ‘Wave 1 locations’ which were the worst performing, and they are set to close the week of March 30. The remaining 118 ‘Wave 2 locations’ are expected to shutter before May 1.
F21 OpCo is working to see if it can salvage the brand with a partner, or if it can sell some of its assets or all of them.
New York City, NY, USA - August 27, 2015: Diverse group of people pass by Forever 21 clothing retailer in Times Square. Disney store next door.
Forever 21 had more than 800 locations worldwide at its peak (Picture: Getty Images)
The Wave 1 locations are not expected to attract potential buyers.
Forever 21 began in a 900-square-foot store in Los Angeles called Fashion 21. It quickly expanded in the late 1980s and 1990s even as online shopping started becoming popular. It also expanded internationally.
It operated more than 800 locations worldwide and had $4billion in sales and 43,000 employees in its heyday.
‘We are also grateful for the many years of support from our partners and our loyal customers, who have allowed us to serve as a fashion industry leader and go-to retailer for generations,’ Sell said.
Shanghai,China-July 30th 2024: Shein, Forever 21, H&M, ZARA, UNIQLO, Urban Outfitters, Mango, GAP, New Look. Assorted fast-fashion company brands
Forever 21 expanded its retail footprint even as many shoppers started making purchases online (Picture: Getty Images)
Store locations and its websites abroad will continue running.
Retailers like Forever 21 pay more fees than online clothing companies like Shein and Temu, which use the ‘de minimis exemption’ to avoid tariffs and import duties on goods under $800 in value and can sell items at a higher discount.
Forever 21’s bankruptcy comes a month-and-a-half after a research group predicted that the US will see double the number of store closures this year compared to 2024. It estimated that 15,000 stores will shutter this year and only 5,800 will open.
Store closures already confirmed for this year include 66 Macy’s stores across 22 states.
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