Forever 21 Files for Bankruptcy
Forever 21 is the latest mall linchpin to file for bankruptcy. The fast fashion chain that sells inexpensive clothing announced the filing this weekend, noting that it will close up to 178 stores, the New York Times reports.
In a statement shared with customers, the company said that they have not yet decided which stores will close.
“The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords,” they wrote.
CNN Business noted that bankruptcy allows retailers to get out of outstanding leases, reducing the cost of shuttering stores. The company said that it plans to leave open enough stores so that no American markets are entirely left without an outpost of the chain. CNN shares that the company is currently worth $3.4 billion and employees 30,000 people.
“We do…expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the U.S.,” the company wrote.
Forever 21 has not yet shuttered, but its bankruptcy is another symptom of an ongoing problem with mall retail. As consumers move toward a mix of online shopping and buying locally, chain stores have struggled to stay afloat. Payless, Delia’s, Charlotte Russe, Wet Seal and American Apparel have all filed for bankruptcy in the back half of the ’10s with several of those companies shuttering every last one of their stores. Forever 21 is uniquely vulnerable to current trends in clothes shopping as its both largely situated in malls that customers are avoiding and a purveyor of “fast fashion,” cheap and frequently short-lived clothing that has been the target of ire among environmentally conscious consumers.