Forever 21 files for bankruptcy in US, again
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The news: Fast fashion retailer Forever 21 has filed for bankruptcy for the second time in six years, citing rising costs, competition from online retailers such as Shein and Temu, and weak mall traffic.
The numbers: The US retailer entered Chapter 11 proceedings with USD1.58 billion ($2.5 billion) in debt after losing more than USD400 million over the past three years. It plans liquidation sales at approximately 350 US stores while seeking a buyer through a court-supervised process.
Its international stores are not included in the filings and will continue operating normally, according to the statement.
The context: Forever 21, owned by Catalyst Brands, previously filed for bankruptcy in 2019 and was acquired by Sparc Group, a joint venture of Authentic Brands, Simon Property Group, and Brookfield Asset Management.
A 2023 partnership with Shein did not reverse its financial struggles. The company cited the "de minimis" exemption, which allows duty-free imports of low-value items, as a factor enabling foreign competitors to undercut its pricing.
Authentic Brands will continue to own Forever 21’s trademark and intellectual property.
The sources: Forever 21 statement , Reuters
