The operator of fast fashion brand Forever 21 in the United States has filed for Chapter 11 bankruptcy. The filing was made in the Bankruptcy Court of Delaware.
This is the company's second filing in six years. A group of investors was able to save the company in 2019 when it first filed for bankruptcy.
According to The New York Times, the company listed estimated assets as between $100 million and $500 million. As for liabilities, it listed them as between $1 billion to $5 billion.
"We have been unable to find a sustainable path forward, given competition from foreign fast-fashion companies... as well as rising costs, economic challenges impacting our core customers," Chief Financial Officer Brad Sell said in a statement, per the BBC.
Will Online, Physical Stores Remain Open?
Forever 21 has assured that its online and physical stores in the US will remain open to serve customers. However, the company notes that it has started "its process of winding down."
Liquidation sales will be conducted in stores in the United States. In addition, a court-supervised process will oversee the sale of some or all of Forever 21's assets.
"In the event of a successful sale, the Company may pivot away from a full wind-down of operations," Forever 21 said in a statement.
It should be noted that international stores will not be affected by the bankruptcy filing.
Founded in 1984 by South Korean immigrants, Forever 21 has been struggling due to intense competition, particularly the rise of online retailers. Rising prices have also proved to be detrimental to the growth of the company.
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