Forever 21 is closer to closing its U.S. business after the brand’s operating company filed for bankruptcy protection.
The company said in a statement that its stores and websites in the U.S. will remain open as the “start and end process.”
Forever 21 was once a favorite among young women around the world, but it has been working hard to attract customers to the store due to rising prices and the growing popularity of online shopping.
The company first filed for bankruptcy protection in 2019, but a group of investors eventually bought bankruptcy through a joint venture.
“We cannot find a path to sustainable development given the competition among foreign fast fashion companies and the rising costs, the economic challenges that affect our core customers,” Brad Sell, the company’s chief financial officer, said in a statement.
The company said it will conduct liquidation sales in its stores, with some or all of its assets going to be sold in court oversight proceedings.
“If sold successfully, the company could be away from the full winds of operations,” the company statement said.
Chapter 11 Protection delays the obligations of the U.S. company to creditors, giving it time to reorganize its debt or sell part of its business.
Forever 21 stores and e-commerce platforms outside the United States are operated by other licensees and will not be affected by bankruptcy protection documents.
The fast fashion retailer was founded in Los Angeles in 1984 by South Korean Immigration.
Over the next few decades, it became increasingly popular with young people, and the brand became a competitor to fast fashion giants such as Zara and H&M.
When it peaked in 2016, there were 800 Forever stores worldwide, 500 of which are located in the United States.
