Forever 21 could be one more step towards the closure of operations in the United States after the brand operating company has filed a bankruptcy file.
The firm said in a statement that its stores and website in the United States will remain open because it “begins its liquidation process”.
Forever 21 was formerly a favorite for young women from around the world, but it has struggled to attract customers to its stores due to the increase in prices and the growing popularity of online purchases.
The company filed a bankruptcy file for the first time in 2019, but a group of investors ended up buying it through a joint venture.
“We were unable to find a sustainable path, given the competition for rapid foreign fashion companies … as well as the cost increase, the economic challenges having an impact on our main customers,” said Brad Sell, the company’s financial director in a statement.
The firm said that it would make liquidation sales in its stores and that some or all its assets are sold in a process supervised by the court.
“In the event of a successful sale, the company can detach from an end of operations,” said the company’s press release.
Chapter 11 Protection refers to the obligations of an American company towards its creditors, giving it time to reorganize its debts or sell parts of the company.
Forever 21 stores and electronic commerce platforms outside the United States are operated by other licensees and will not be affected by the bankruptcy protection file.
The rapid fashion retailer was founded in Los Angeles in 1984 by South Korean immigrants.
Its inexpensive and fashionable accessories and accessories have become more and more popular with young people in the coming decades and the brand has become a competitor of rapid fashion giants such as Zara and H&M.
At its peak in 2016, there were 800 Forever 21 stores worldwide, 500 of which were located in the United States.
