Forever 21, the California-based retailer that helped popularize fast fashion in the U.S. with its bustling stores and $5 tops, announced Sunday that it would file for bankruptcy, another sign of the eroding power of shopping malls and the shifting tastes of young consumers.
The private, family-held company capped months of speculation about its restructuring efforts by saying that it would cease operations in 40 countries, including Canada and Japan, as part of a Chapter 11 filing. It will close up to 178 stores in the U.S. and up to 350 in all, The New York Times reports.
The bankruptcy is a blow to a company that prided itself on embodying the American dream, as well as a reminder of how quickly the retail landscape is transforming. Forever 21 experienced big success in the early 2000s, joining Zara and H&M in making fast, disposable fashion widely available to American shoppers. However, in recent years younger shoppers have increasingly turned to consigned goods and brands that claim sustainability as a value, says Wendy Liebmann, chief executive of the consultancy WSL Strategic Retail.
Forever 21, which said e-commerce made up 16% of its sales, saw its revenue drop to $3.3 billion last year, down from $4.4 billion in 2016. The company employs about 32,800 people, down from 43,000 in 2016.
Forever 21’s bankruptcy puts a spotlight on the widening chasm between America’s lower-quality malls, which are losing customers and anchor tenants, and its top shopping centers, which continue to draw foot traffic. Read the full story.
