An operator of several Forever 21 retail stores, once a go-to destination for affordable and trendy fashion, has filed for bankruptcy following years of declining performance.
Forever21
According to court documents, the company filed for Chapter 11 bankruptcy in Delaware, listing assets between $100 million and $500 million and liabilities ranging from $1 billion to $10 billion.
Bloomberg reported in February that Forever 21 had been exploring various turnaround strategies, including a potential second bankruptcy filing.
This marks the brand’s second bankruptcy, following its first in 2019, which led to intense disputes, minimal creditor recovery, and the closure of hundreds of stores. Today, according to its website, Forever 21 operates more than 540 locations worldwide.
The retailer was acquired out of bankruptcy by a group of buyers, including Simon Property Group, Brookfield Corp. and Authentic Brands, through their joint venture, Sparc Group.
Earlier this year, Sparc merged with JCPenney to form Catalyst Brands. At the time of the merger, Catalyst stated it was assessing strategic options for Forever 21’s operations.
The company’s struggles reflect broader retail challenges, as inflation prompts consumers to cut back on clothing purchases. Forever 21 has also faced increased competition from online shopping, drawing traffic away from malls.
