Forever 21’s U.S. operating company has filed for Chapter 11 bankruptcy for the second time in six years, struggling with declining mall traffic and fierce competition from online retailers. The filing, submitted on Sunday, signals a likely liquidation after the company failed to secure a buyer for its approximately 350 U.S. stores.
While its international locations remain unaffected, the brand’s intellectual property—still owned by Authentic Brands Group—may continue in some capacity.
The downfall of Forever 21 underscores the decline of the American mega-mall era, exacerbated by e-commerce growth. The retailer previously filed for bankruptcy in 2019 before being acquired by Sparc, a partnership between Authentic Brands Group, Simon Property Group, and Brookfield Asset Management.
Forever 21 has announced liquidation sales at its stores while simultaneously exploring a court-supervised sale of its assets. The company reported estimated assets between $100 million and $500 million, with liabilities ranging from $1 billion to $10 billion. The filing also listed 10,001 to 25,000 creditors.
If a successful sale occurs, the company may transition from full liquidation to a going-concern transaction. Its U.S. stores and website will remain operational during the process.
Forever 21 is currently owned by Catalyst Brands, formed in January through the merger of Sparc Group and JC Penney. Catalyst had previously indicated it was exploring strategic options for the struggling brand. Despite the bankruptcy, Authentic Brands retains Forever 21’s trademark, which may continue in some capacity.
Founded in Los Angeles in 1984 by South Korean immigrants, Forever 21 was once a dominant force in fast fashion, peaking at 800 global stores, including 500 in the U.S. However, shifting consumer preferences and digital retail competition have led to its downfall.
Source: Swifteradio.com
