The end is near for Forever 21.
The fast-fashion retailer has filed for bankruptcy for a second time and will permanently shut down all its stores in the United States, F21 OpCo, the company operating Forever 21, announced in a release.
Going forward, there will be an “an orderly wind down of its U.S. business,” while international Forever 21 locations remain unaffected, according to the release.
Throughout this “wind down” period, the retailer’s U.S. stores and website will remain open, and stores will conduct liquidation sales, the company said.
F21 OpCo is also trying to “solicit interest” for a sale of some or all of its assets.
“While we have evaluated all options to best position the Company for the future, we have been unable to find a sustainable path forward, given competition from foreign fast fashion companies,” said F21 OpCo’s chief financial officer, Brad Sell.
He noted that these foreign fast-fashion companies “have been able to take advantage of the de minimis exemption,” which he says undercuts F21 OpCo’s “pricing and margin.”
The de minimis exemption is a US customs rule that allows foreign imports worth less than $800 to enter the U.S. without being subject to duties or taxes, according to the National Foreign Trade Council.
Brick-and-mortar fast-fashion retailers have faced steep competition in recent years from online retailers, such as Shein and Temu, that offer extremely low-priced goods to consumers.
Sell also cited “rising costs, economic challenges impacting our core customers, and evolving consumer trends” as having contributed to Forever 21’s current struggles.
This is the second time Forever 21 has filed for bankruptcy. The company filed for Chapter 11 protection in 2019, reporting between $1 billion and $10 billion in liabilities owed to more than 100,000 creditors, according to documents filed in the U.S. Bankruptcy Court in Wilmington, Delaware, at the time.
