Forever 21 has filed for Chapter 11 bankruptcy protection for the second time in six years. The company will conduct liquidation sales across its U.S. stores while undergoing a court-supervised sale.
Court filings indicate that F21 Opco has filed for Chapter 11 bankruptcy in Delaware, stating that its total funded debt is around $1.58 billion.
The fast-fashion retailer has recently faced stiff online competition from Shein and Temu, along with decreasing in-store traffic.
Company CEO, Brad Sell, stated in the filing: “We have been unable to find a sustainable path forward, given competition from foreign fast fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends.”
Forever 21 is currently owned by Catalyst Brands, a merger formed by its former owner, Sparc Group, and JC Penney. Authentic Brands holds the trademark and intellectual property of Forever 21.
Authentic Brands CEO Jamie Salter recently referred to acquiring Forever 21 as “the biggest mistake I made.”
By CEO NA Editorial Staff
