According to court papers, the U.S.-based Forever 21 filed for Chapter 11 bankruptcy over the weekend and will attempt to sell all or some of its resources.
The processing is the next debt for the business in six times. Forever 21 was planning to close at least 200 stores , and lay off more than 350 people in its corporate office in downtown Los Angeles, according to a report from The Times next month.
The L.A.-based retail chain will initiate a smooth transition from its U.S. operations while looking for a client.
Locations outside the United States will remain intact, while some stores and the chain’s website may remain empty.
According to Brad Sell, CEO of Forever 21’s U.S. functioning firm, F21 OpCo,” We made the decision to file for Chapter 11 to adopt a court-supervised marketing method to request a going concern transaction.”
While we have evaluated all possibilities to best position the business for the future, he said in a speech.” We have been unable to get a green way ahead.”
According to documents submitted to the U.S. Bankruptcy Court in Delaware, Forever 21 has assets of between$ 100 million and$ 500 million and liabilities of between$ 100 million and$ 10 billion.
Authentic Brands Group will continue to own Forever 21’s intellectual property throughout the debt process and have the option of granting additional owners a license to use the product. Catalyst Brands owns F21 OpCo.
The choice of our U.S. licensee to change how it conducts business does not have an impact on Forever 21’s intellectual property or international business, according to Authentic Brands Group’s international president of life-style Jarrod Weber in a statement.
He claimed that Forever 21 is one of the most well-known brands in the fast-paced industry. Forever 21 is adapting, as the saying goes goes:” List is changing, and Like many companies.
Forever 21 was founded in 1984 by North Vietnamese husband-and-wife duo Do Won Chang and Jin Sook Chang. By the mid-2000s, it had become a well-known brand in the fashion industry and helped spread the idea of strong fashion in the United States.
Strong fashion, which refers to the widespread production of affordable clothing, has lost popularity with many consumers because it has been linked to spend and climate change.
” Quick style has a bit of a black eye,” said Ray Wimer, a professor of financial discipline at Syracuse University, “undoubtedly is a factor, especially for the younger century.” He said younger buyers are drawn to manufacturers with sustainable initiatives like H&, M, and Zara because they are more concerned about the environment.
According to Wimer, Forever 21 also faced fierce competition from online stores like Shein and Temu and failed to employ social media influencers to reach a wider market. And big box stores frequently sell clothing at unbeatable prices, despite not being wholly fashion-focused.
Walmart and Amazon have both made significant investments in their clothing divisions, and they both offer that at a lower price level, according to Wimer. ” Forever 21 don’t thrive,” he said.
The working company declared bankruptcy for the first time in 2019.
The classic name was continue, according to Wimer, but the brick-and-mortar sites are unlikely to survive if Authentic Brands Group licenses Forever 21’s product to a new controller.
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