Fashion chain Forever 21 also Low-price, a one-time sizzling destination for teen shoppers that fell victim to its fast expansion and changing consumer tastes, has filed for Chapter 11 bankruptcy protection.
The privately held company primarily based in Los Angeles stated Sunday it can shut as much as 178 stores. As of the bankruptcy filing, the company operated about 800 stores globally, including more than 500 stores within the U.S.
The company mentioned it would concentrate on maximizing the value of its U.S. stores and shutter specific international locations. Forever 21 plans to shut most of its sites in Asia and Europe, however, will proceed to operate in Mexico and Latin America. Forever 21 joins Barneys New York and Diesel USA in a growing record of retailers looking for bankruptcy protection as they battle online competitors. Others like Payless ShoeSource and Charlotte Russe have shut down completely.
The numbers bear out the crisis dealing with traditional retailers. So far this year, publicly traded U.S. retailers have announced they will shut 8,558 stores and open 3,446, based on the global research firm Coresight Research. That compares with 5,844 closures and 3,258 openings in all of 2018.
Their popularity grew through the Great Recession when consumers sought fashion bargains.
However, over the last year or so, fast fashion has fallen out of style. Young customers are dropping interest in throw-away clothes and are more keen on buying eco-friendly products. They’re additionally gravitating towards rental and online second-hand websites like Thredup, where they see clothes worn again as an alternative of ending up in a landfill.
These trends are occurring while discounters like Target have spruced up their fashion assortments, stealing away customers.
Forever 21 has additionally been more vulnerable than another chain due to its massive footprints in major malls, which are attracting fewer shoppers.