Forever 21 store. Photo:
Getty
Forever 21 is set to close its doors.
The long-running teen clothing store plans to permanently shut down its stores across the U.S. after filing for bankruptcy for the second time, the retailer has announced.
Forever 21 U.S. operator OpCO, LLC. said stores are closing down due to “rising costs” and “competition from fast fashion companies.” The company is set to wind down its operations “while continuing to conduct a marketing process to solicit interest” over the coming weeks.
Chief Financial Officer Brad Sell said in a statement, “While we have evaluated all options to best position the Company for the future, we have been unable to find a sustainable path forward … we will work diligently to minimize the impact on our employees, customers, vendors and other stakeholders.”
According to court documents obtained by PEOPLE, the operator filed bankruptcy on Feb. 19, citing Forever 21’s two main stores in New York City on 435 Seventh Avenue and 1540 Broadway as being impacted. The company previously filed for bankruptcy in September 2019.
Forever 21 has filed for bankruptcy for the second time. Kentaro Takahashi/Bloomberg via Getty
Closure is due to start on May 27 and finish on June 10. Forever 21 stores outside the U.S. are operated by other licensees and “will continue operating in the ordinary course,” the company confirmed to PEOPLE.
“Authentic Brands Group continues to own the intellectual property associated with the Forever 21 brand and may license the brand to other operators,” the company added.
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Forever 21 was created by South Korean couple Do Won Chang and Jin Sook Chang in 1984 and reigned in popularity among young shoppers in the late ‘90s and early ‘00s. In early March, rumors surfaced of the fast fashion brand filing for bankruptcy for the second time, affecting potentially 200 stores, Syracuse.com reported.
Forever 21 stores are shutting down across the U.S. Eric Lee/Bloomberg via Getty
A source previously told PEOPLE that if a Chapter 11 restructuring is filed it would only affect “Forever 21’s U.S. operating company, which manages the brand’s stores and day-to-day retail operations in the U.S.” They added that the company’s global business would not be affected by the filing.
Other sources told PEOPLE that the brand is planning to move toward an online business model to better match its competitors, such as Temu and Shein, as more stores wind down in the future.
“Forever 21’s U.S. business is said to be shifting toward a digital-first model, supported by a streamlined retail footprint focused on approximately 100 top-performing stores,” the insiders said.
