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Forever 21 Files for Bankruptcy in the United States and Will Close All Physical Stores in the Country; International Operations Remain Active
Forever 21, a fashion retailer known in the United States, has declared bankruptcy. The announcement marks the closure of over 300 physical stores in the country. The company justified the decision due to rising operational costs and intense competition from online retailers, especially Chinese platforms like Shein.
However, the bankruptcy only affects the North American units. The international operations of the brand continue to function normally. The official Forever 21 website is also still active, while the physical stores are holding sales to clear out inventory.
According to an article published by Forbes, Authentic Brands Group, which holds the brand’s intellectual property in other countries, may license it to new operators. Forever 21 is also looking for buyers for some or all of its assets, as stated in the official announcement.
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This is not the first financial crisis faced by the company. In 2019, the chain had already filed for bankruptcy protection in the United States. The current bankruptcy consolidates a trajectory of difficulties that has lasted for over a decade.
Founded in 1984, Forever 21 once competed with brands like H&M and Abercrombie & Fitch. In 2005, the chain recorded revenue of US$ 1 billion.
In 2015, it surpassed the US$ 4 billion mark. However, from the 2010s onwards, sales began to decline. The rise of digital retail contributed to the chain’s loss of market share. In Brazil, Forever 21 operated with 15 stores. But in 2022, all units were closed.
Now, the brand’s future will depend on new negotiations. Meanwhile, the American public bids farewell to a chain that has marked generations with affordable fashion and youthful style.
With information from Diário do Comércio.
