Forever 21 was once the top fast-fashion retailer and the first of its kind. In 2015, its peak, it was a 4.4 billion dollar company with the expectation to be an 8 billion dollar company by 2017. They planned to open 600 more stores and expand the ones they currently had up and running. But with online retailers on the rise and millennials preferring to shop online and not in person, the fall of Forever 21 began.
Forever 21 is closing some of its doors across the country as they have filed for bankruptcy reporting one billion dollars in liabilities. They filed for bankruptcy on September 29th in an official letter posted to their online site. They assure their customers that they are not going out of business and that they filed for bankruptcy “to put us [them] on a successful track for the future.” They will reorganizing their entire company but will this be enough to save Forever 21 forever?
The company decided to file for Chapter 11 protection which allows the business to remain open whilst they organize their debts. This claim is significantly better than Chapter 7 where they would have to “sell its assets to pay creditors.” The hope is that the retailer will return to what they do best and regain the traction they once had. With this revamp of the company and downsizing, Forever 21 has the potential to regrow what they have lost. They assured their customers that they will be “a stronger and more viable company.”
The letter they released didn’t state specifics as to how many stores were closing or which ones, but it is speculated that as many as 300 stores total with 173 across the States. With the rise of online shopping and foot traffic steadily decreasing in malls and brick-and-mortar stores Forever 21 is one of many retailers closing its doors due to what is called the “retail apocalypse.” According to Coresight Research, more than 8,200 retailers in the United States has announced store closings.
With successful online retailers like Romwe, Shein, and others, the fast-fashion industry has shifted with the times. As the customers get younger more and more malls will close as the age of technology increases the need for in person retailers will dissipate to next to nothing.