Earlier this week Forever 21, a well-known American fast-fashion brand, filed for bankruptcy in the U.S. for the second time in six years. The company plans to shut down all its U.S. operations, including closing all U.S. stores and holding clearance sales to sell off its remaining products.
Forever 21 was founded in Los Angeles in 1984 by South Korean immigrants. It quickly expanded by offering trendy clothing at very affordable prices. At its peak, the company had over 800 stores globally and generated annual sales of more than $4 billion.
In 2019, Forever 21 first filed for bankruptcy due to rising debt and tough competition from online stores. It closed many locations and left several international markets to stay in business. This new bankruptcy shows the ongoing challenges faced by traditional retailers in the fast-fashion industry, particularly from online competitors. “We’ve been unable to find a sustainable path forward, given competition from foreign fast-fashion companies (…),” said Brad Sell, finance chief at the company that operates Forever 21 U.S. stores.
The closing of U.S. stores will lead to many job losses, affecting thousands of workers. Customers can expect liquidation sales as the company seeks to sell off remaining inventory. However, Forever 21’s international stores are not affected by this bankruptcy.
Forever 21’s downfall is part of a larger trend where physical stores find it hard to keep up with online fashion brands. This situation highlights the need for traditional stores to change and adapt to new shopping habits.
Source: Reuters
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