Forever 21’s operator in the United States of America filed for bankruptcy on Sunday, as the brand that helped popularize fast fashion in the 90s struggles to run an offline retail business among big online retailers like Amazon and others.
F21 OpCo, the operator of Forever 21, as well as some of its subsidiaries, have filed for Chapter 11 bankruptcy in the Bankruptcy Court of Delaware, according to the court documents. The company listed its assets as between $100 million and $500 million. However, the worst part is that the operator’s liabilities have reached between $1 billion and $5 billion. It is worth noting that the company had also filed for bankruptcy in 2019. This shows that the brand has been struggling for the last six years.
Forever 21, founded in 1984, gained popularity in the late ’90s and early 2000s by selling cheaply made fashion apparel that was similar to the clothes made by top designers at the time, that too at rock-bottom prices. At its peak, the brand made over $4 billion in revenue annually and employed more than 43,000 employees across 100+ stores.
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However, the retailer expanded too aggressively just as technology was taking over and online retailing was entering the mainstream market. After struggling for years, the brand was finally bought by Sparc Group, which sold it to Shien by hand in 2023. Under the agreement, Shien could operate shores within the stores of Forever 21 and the fast fashion retailer could sell its merchandise on Shien’s website.
