Forever 21, the prominent fast-fashion retailer, is preparing to shutter approximately 200 additional stores as it approaches a potential second bankruptcy filing, which could occur as early as next month.
This move comes as the company struggles to find a suitable buyer for its remaining operations; without one, the entire chain of around 350 stores may face liquidation.
Notably, many of the stores slated for closure have been unprofitable for years.
The Forever 21 brand is currently owned by Authentic Brands Group (ABG), which licenses it to the operating company F21 OpCo.
F21 OpCo was recently acquired by Catalyst Brands, a conglomerate that also oversees retail names like Aéropostale and Eddie Bauer.
Catalyst Brands is managed by shareholders including Simon Property Group, Brookfield Corporation, ABG, and the online retailer Shein.
Despite the looming bankruptcy, ABG intends to continue licensing the Forever 21 brand to existing retailers and distributors.
This development follows a series of store closures across the United States.
For instance, the Forever 21 location at Westfield Montgomery Mall in Bethesda, Maryland, has initiated “everything must go” sales with discounts ranging from 10% to 40%, anticipating closure within the next two to three months.
Similarly, three of the six Forever 21 stores in Connecticut—in Manchester, Milford, and Waterford—are set to close this spring as part of the company’s efforts to avoid a second Chapter 11 bankruptcy filing.
Forever 21 filed for bankruptcy in 2019 due to significant debt and overexpansion.
In 2020, a consortium including Simon Property Group, Brookfield Corporation, and Authentic Brands Group acquired the company.
However, the retailer has continued to face challenges, particularly from online competitors like Shein and Temu, who have eroded its market share.
As the retail landscape evolves, Forever 21’s situation underscores the difficulties traditional brick-and-mortar stores face in adapting to changing consumer preferences and the rise of e-commerce.
