The operator of Forever 21 in the US filed for bankruptcy on Sunday. This makes apparel companies that popularize fast fashion in the US struggle to compete with online retailers.
According to court documents, the operator F21 OPCO and some U.S. subsidiaries filed for Chapter 11 bankruptcy in the Delaware Bankruptcy Court. The Company lists its estimated assets as $100 million to $500 million and liabilities of $1 billion to $5 billion. The company also filed for bankruptcy in 2019.
Forever 21 was successful in the early 2000s, selling cheaply produced fashions and was attractive at rock bottom prices for clothing inspired by designer styles. At its peak, annual sales exceeded $4 billion, employing more than 43,000 people worldwide in hundreds of stores.
However, as technology began to order businesses, retailers expanded too aggressively.
It first filed for bankruptcy in 2019, closing more than 30% of its US stores, and was later purchased from bankruptcy by SPARC Group, a joint venture between Authentic Brands Group and Mall operator Simon Property Group.
In 2023, SPARC signed an agreement with Shein, a Chinese e-commerce retailer known for its Ultra Low Prices. Shein agreed to buy about a third of SPARC's shares. Under the agreement, Shein will one day run a store with Forever 21 Outlets, and Forever 21 clothing will be sold on Shein's site.
Forever 21 did not respond immediately to requests for comment.
