Another clothing staple teens and young adults has fallen victim to bankruptcy. Fast fashion retailer Forever 21 has announced that they are filing for bankruptcy for the second time in six years. They expect to close all of their US locations. The company, which was founded in 1984, has increasingly faded over the years. It has failed to compete against online retailers such as SHEIN, Temu, and Amazon. Although this news isn’t completely shocking, it provides a heartbreaking realization. Yet another clothing pillar from our youth has followed the fates of stores like Wet Seal and Love Culture.
The retailer’s operating company is expected to cease operations by filing Chapter 11 bankruptcy, and has already begun the liquidation process at 350 of its locations. As of now, Forever 21 is still open for bids if a buyer is willing to take on its inventory. The company has been pitching to prospective buyers for several months now, but have had not any viable success.
“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,” Chief Financial Officer Brad Sell said in a statement via AP News.
Forever 21 first filed bankruptcy in 2019 only to be hit with the inflation crisis a few months later due to the Covid-19 pandemic. The company enjoyed a brief period of reemergence in 2021 generating $2 billion in revenue and $165 million in EBITDA. However as inflation and their competition increased, they began to see a decline in revenue. Foreign sites such as SHEIN and Temu were able to sell the same clothing items as Forever 21 but for half the price, causing consumers to defect.
Reactions to Forever 21 Closing
The Future of Mall Retailers
Over the years we’ve seen many beloved stores become obsolete due to the surge of online retailers. The fall of Forever 21 is especially heartbreaking due to it being one of the last stores aimed towards young girls. For many of us, the closing of Forever 21 also represents the door closing on a chapter of our lives where the brand was at the center of our being. Ultimately, we’re seeing the online fast fashion retailer empire replacing physical stores before our very eyes. It poses the question are sites like SHEIN, Temu, and Fashion Nova completely to blame for the demise of certain companies or did Forever 21 fail to properly revamp and pivot to their consumer’s needs?
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