Forever 21, the iconic fashion retailer founded by South Korean immigrants in Los Angeles in 1984, has filed for bankruptcy protection once again. This move marks a significant step towards potentially shutting down its operations in the United States. At its peak in 2016, Forever 21 boasted 800 stores worldwide, with 500 of these located across the United States. However, the company has struggled to maintain its customer base in recent years.
The challenges faced by Forever 21 include rising prices and the shifting consumer preference towards online shopping. These factors, coupled with stiff competition from fast-fashion giants such as Zara and H&M, have compounded the retailer's difficulties in attracting customers to its physical stores. Despite this, the company plans to keep its US stores and website operational during the bankruptcy process.
In 2019, Forever 21 filed for bankruptcy protection for the first time, which led to a group of investors purchasing the brand through a joint venture. However, the retailer's struggles have persisted, prompting this latest filing. Brad Sell, the company's chief financial officer, commented on the situation:
"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."
While Forever 21's US operations face uncertainty, its international business remains unaffected. The retailer's shops and e-commerce platforms outside of the United States are operated by separate license-holders and will continue to function as usual.
Forever 21 gained popularity over the decades for offering inexpensive and trendy clothing and accessories, particularly appealing to younger consumers. However, the changing retail landscape has posed significant challenges for the company in maintaining its market position.