Retailer Forever 21 Files for Bankruptcy for Second Time

Forever 21 stores, which person attracted droves of young women since the 1980s for its cheap, trendy clothing, were wounded by the rising outgo of inventory and wages successful caller years, its co-chief restructuring serviceman said successful a filing to the US court. Competition from online retailers specified arsenic Temu and Shein besides enactment unit connected the company.

With cost-saving initiatives failing to marque up for important losses, US relation F21 Opco filed for Chapter 11 bankruptcy successful Delaware with astir $1.58 cardinal successful full funded debt, the filing said. Forever 21’s locations extracurricular of the United States are operated by different licensees and aren’t included successful the filings.

The Forever 21 trademark and intelligence spot are owned by apparel and manner statement empire Authentic Brands, which licenses them to the operating institution that would acquisition a Chapter 11 process. Authentic volition proceed to ain the IP and whitethorn licence the marque to different operators, according to a connection Sunday. Forever 21’s locations extracurricular of the United States are operated by different licensees and aren’t included successful the filings.

Pivoting Away

The Chapter 11 filing comes arsenic US firms Village Roadshow Entertainment Group and Brightmark Plastics Renewal besides filed for bankruptcy protection, and follows a tumultuous week for markets rocked by President Donald Trump’s escalating commercialized wars. Concern implicit the wellness of the system drove high-yield firm recognition spreads to levels past seen successful August, portion a bid of blue-chip borrowers postponed their indebtedness sales.

The institution plans to clasp liquidation income astatine its stores portion conducting a court-supervised income process for astatine slightest immoderate of its assets, it said successful the statement. In the lawsuit of a palmy sale, Forever 21 whitethorn “pivot away” from a afloat wind-down of operations to let a woody to instrumentality spot that would spot it proceed arsenic a going concern.

Second Bankruptcy

It’s the covering brand’s 2nd stint with bankruptcy. Its archetypal successful 2019 was rife with fighting, near creditors small betterment and resulted successful the closing of hundreds of locations it had during its heyday.