For the second time in six years, the Forever 21 company has filed for bankruptcy. Forever 21 is a popular retailer that offers lots of different trendy clothes and accessories for everyone. The brand was first founded in 1984 and became known for its affordable prices and wide range of styles. However, in recent years, the company has faced lots of financial challenges and has filed for bankruptcy most recently this month.
The clothing brand has faced many issues since their first time filing for bankruptcy in 2019, where they ended up closing over 150 of its 534 stores and sold the rest. As it is currently filing for bankruptcy again six years later, reporters are saying that Forever 21 plans liquidation sales (when a store offers big discounts to sell off all its inventory) as it goes through the bankruptcy process again. Many people have even told news sources such as Bloomberg, that the store plans to close 200 of its remaining 350 locations.
The company’s Chief Financial Officer, Brad Sell, has stated that it will continue to run its in person and online stores for now as it is currently implementing an “orderly wind-down” of its business in the country, stated by the CFO. As for the international location, those will continue to stay open since those stores have remained unaffected by financial struggles. There are many reasons as to why Forever 21 has been struggling financially, but the main reason is the rise in competition from foreign fast fashion companies in the last few years. Online stores such as Shein and Temu have been their biggest competitors since the pandemic when online shopping became a bigger thing. Senior Zoe Lake shares her opinions on the stores closing saying, “I think Shien is more up to date with current trends than Forever 21 and has a lot more variety of clothing on their website. Shien is also cheaper, and with all those factors combined, it makes sense why the store is filing for bankruptcy.” These online stores mass produce in-style cheap clothing making teenagers more influenced to buy there rather than stores like Forever 21. Sell has also stated that the company has been struggling with rising costs, economic challenges, and evolving consumer trends which has led to their decision to file for bankruptcy.
While the store used to be the most trendy and in-style among teenagers, in recent years, it has no longer held that same reputation. Many teenagers nowadays don’t buy from the store or find any interest in it. “The last time I went to Forever 21, I was in middle school,” says senior Scarlett Allen. “But even then, the clothes were tacky and felt cheap. I am not surprised that the company has been struggling.”
The lack of popularity of Forever 21 has led to its downfall in the past decade. Recent competition in online stores has caused many financial issues for the company resulting in its filing for bankruptcy twice in the past six years. While many aren’t affected by its closing, it still marks the end to a decades long company that has become a staple in many malls around the world.
