Forever 21 Has Filed for Bankruptcy Closing Nearly 350 Stores
Another major mall giant is going under and if you're young, hip and frugal this one's gonna hurt. Forever 21 filed for Chapter 11 bankruptcy protection on Sunday and to really add to the sting of the event, reports say they will now close a 178 stores in the U.S. and almost 350 stores overall.
The 35-year-old retailer does business in nearly 40 countries and has struggled as of late with the changing consumer styles and shopping habits. The company was built on making stylish "quick to wear" clothing with affordable price points. Founded in 1984 in Los Angeles by Do Won Chang and Jin Sook Chang. The husband and wife team saved for three years before opening their first store.
The company grew quickly and the stores became almost mega stores with the average Forever 21 being 38,000 square feet. “We went from seven countries to 47 countries within a less-than-six-year time frame and with that came a lot of complexity,” said Linda Chang, Executive Vice President of Forever 21, Inc. in the press release. “The retail industry is obviously changing—there has been a softening of mall traffic and sales are shifting more to online.” The company states they will attempt to restructure.
Forever 21 isn't the first to fall victim to what CBS describes as a changing way of fashion for teens and young adults. Most recently we saw the end of Claire's and Charlotte Russe, also favorites of the younger shopper. They note that young customers are losing interest in fast fashion in favor of those ego friendly go green styles and brands.
No word on if the local Forever 21, that was just redesigned to be larger and grander, at the Genesee Valley Center will be on the list of closings.