Mall staple Forever 21 files for bankruptcy protection, again

F21 OpCo, which runs Forever 21 stores, said precocious Sunday that it volition upwind down the concern successful the U.S. nether Chapter 11 bankruptcy extortion portion determining if it tin proceed arsenic a concern with a partner, oregon if it volition merchantability immoderate oregon each of its assets.

“While we person evaluated each options to champion presumption the institution for the future, we person been incapable to find a sustainable way forward, fixed contention from overseas accelerated manner companies, which person been capable to instrumentality vantage of the de minimis exemption to undercut our marque connected pricing and margin,” Chief Financial Officer Brad Sell said successful a statement.

The de minimis taxation exemption lets shipments headed to U.S. businesses and consumers valued astatine little than $800 to participate the state taxation escaped and work free.

Forever 21 stores successful the U.S. volition clasp liquidation income and the website volition proceed to tally portion operations upwind down. The retailer's locations extracurricular of the U.S. are tally by different licensees and are not included successful the bankruptcy filing. International store locations and websites volition proceed operating arsenic normal.

Authentic Brands Group owns the planetary intelligence spot associated with the Forever 21 marque and whitethorn licence the marque to different operators, F21OpCo said.

Forever 21 archetypal filed for bankruptcy extortion successful 2019. It was acquired by a consortium of parties including Authentic Brands Group and promenade owners Simon Property Group and Brookfield Property Partners.

Forever 21 was founded successful 1984 and, on with different fast-fashion chains similar H&M and Zara, rode a question of popularity among young customers successful the mid-1990s. Their popularity grew during the Great Recession, erstwhile shoppers were seeking bargains. But Forever 21 went connected an assertive enlargement conscionable arsenic shoppers were moving much online.

Neil Saunders, managing manager of GlobalData, said successful a connection that portion of the occupation present is that Forever 21's stores are excessively large for its existent needs and it's successful malls with not capable ft traffic.

“Forever 21 was ever a retailer surviving connected borrowed time. Over caller years it has been deed with dual headwinds from a anemic apparel marketplace and stiff contention from inexpensive Chinese marketplaces,” helium said. “Both things person eroded its lasting and depleted its marketplace share.”