Forever 21 had filed bankruptcy protection, following the closure of its stores in Asia and Europe. One hundred seventy-eight (178) U.S.-based stores out of almost 500 are planning to close while up to 350 stores around the globe will follow these massive closures.
After announcing the planned closing, the stores are now selling their stock at extremely bargained prices before exiting.
Linda Chang, the company’s Executive Vice President, declared, “This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21.”
Chang is the daughter of the founders, Do Won and Jin Sook Chang, who established the company after immigrating to the U.S. from South Korea. In an interview with the New York Times, she stated that their rapid and aggressive expansion, combined with the changing retail landscape, was to blame.
According to the retailer, it has received $275 million in financing from its existing lenders, $75 million in new capital, and some of its affiliated funds which will all be used in maintaining the remaining stores. They have also listed their assets and liabilities between $1 billion to $10 billion, according to the court filing in the U.S. Bankruptcy Court, District of Delaware.
Forever 21 is a Los Angeles-based “fast fashion” shopping mart that was founded in 1984, offering frequent new styles of inexpensive clothes. Regardless of the closure, the company said that it will continue its operations in the remaining stores as they were before and will now focus in maximizing the value of the existing retail outlets.