On Sunday, the Forever 21 operator in the United States applied bankruptcy for the second time in six years and said that it will end in the country, and is affected by the escalation of competition via the Internet in the fast fashion sector and the first place traffic.
The company blames the situation in high costs and foreign companies that benefit from the transactions exempt from customs duties of low -cost beams from China to undermine its power of pricing.
“We have not been able to find a sustainable path forward, given a competition from foreign fast fashion companies, which managed to benefit from exempt from the minimum to undermine our brand on prices and margin,” said Brad Cell, head of finance at F21 OPCO who works for Forever 21.
De Minimis refers to the waiver of standard customs procedures and definitions on imported elements less than $ 800 charged to individuals and help Chinese retailers online such as Shein and TEMU to maintain prices very low.
Donald Trump Stop canceling his administration of the paragraph as part of the fresh tariffs imposed on China in February.
Founded in Los Angeles in 1984 by South Korean immigrants, Forever was 21 common among young shoppers on a round but reasonable clothes. By 2016, it managed about 800 stores worldwide, of which 500 are in the United States.
But the rise of retailers for e-commerce and slow death of huge American clothing companies such as Forever 21 and Bonobos-Parent Express, which applied for bankruptcy last year.
“Retailing brick and mortaries such as Forever 21 work in a high competitive environment where the cost of doing expensive businesses and high inflation rates”, Sarah Foss, head of restructuring in debt, which provides data and analyzes on supported loans.
the retail The sector has witnessed 20 bankruptcy files since the beginning of 2024, while 25 retail chains have at least two bankruptcy files since 2016, according to Debtwire data.
F21 OPCO plans to sales of liquidation in its American stores, while it is going through a sale and marketing from the Court of Supervision of its assets, which estimated nearly $ 100 million to $ 500 million.
Its stores and location in the United States will remain open through this process and its international stores are still not affected.
It has obligations in the limits of one billion dollars to 10 billion dollars, according to the submission of a file with the bankruptcy court in Dilayer Province.
Forever 21 previously It was submitted to bankruptcy Protection in 2019 was directed by Sparc Group, a joint venture between the owner of the original brands and the Simon Property and Brokefield Asset Management.
It is now owned by Catalyst Brands, an entity formed on January 8 through the Merge of SPARC and JC Penness, a chain of stores owned since 2020 by shopping malls operators and Simon Property Group.
When Catalyst brands were formed, he said it is “exploring strategic options” forever 21.
The original brands will continue to own the brands and intellectual ownership of Forever 21, which can live in some way. Her CEO, Jimmy Salter, last year called for Forever 21 “The biggest mistake made.”
