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Forever 21 is preparing for a second bankruptcy filing and planning to close at least 200 stores across the United States. The fast-fashion retailer, which first filed for bankruptcy in 2019, is struggling to compete with online giants like Shein and Temu. The company is seeking financial restructuring and a potential buyer.
If no buyer emerges during the restructuring, the retailer may be forced to liquidate its entire chain of approximately 350 stores, which would impact shopping malls and retail employees nationwide.
Forever 21's U.S. operator, F21 OpCo, is working with restructuring advisers to explore options for addressing its financial struggles. The company confirmed to Reuters that it is exploring strategic options, including a potential sale while reducing costs and optimizing its store footprint. No final decisions have been made regarding the number of stores that may close.
Forever 21's brand and intellectual property remain the property of Authentic Brands Group, which licenses them to F21 OpCo. Authentic Brands, now a unit of Catalyst Brands, will continue licensing the brand regardless of the outcome of the U.S. operations.
The bankruptcy proceedings could begin as early as next month. If a qualified buyer is found, Forever 21 may restructure and remain operational in some capacity.
At its peak, Forever 21 operated over 800 stores worldwide, but changing consumer habits and competition from digital retailers have challenged its brick-and-mortar operations.