Forever21 Officially Filing For Chapter 11 Bankruptcy Protection
Time to grow up…
After months of bankruptcy rumors and a very public scandal involving pop icon Ariana Grande, California-based fast-fashion retailer Forever21 is now officially filing for Chapter 11 bankruptcy protection.
The family-led company, founded by South Korean couple Do Won Chang and Jin Sook Chang, first made its entrance in mid-1980s Los Angeles. When asked about to explain the name, Mr Chang said that Forever 21 was an allusion to the retailer’s target market - 40% of the customers are reportedly between 25 and 40 years old. He continued by saying that “old people wanted to be 21 again, and young people wanted to be 21 forever.”
After celebrating huge successes in the early Noughties, the brand was in direct competition with fast fashion heavy-weights Zara and H&M, and went on to expand aggressively in the following years. “We went from seven countries to 47 countries within a less-than-six-year time frame and with that came a lot of complexity.”, explained Ms Chang.
On Sunday evening, a spokesperson of the retail giant proclaimed that they’ll be filing for Chapter 11 bankruptcy protection, meaning they’re officially postponing their “obligations to its creditors, giving (the brand) time to reorganize its debts or sell parts of the business.” The company is expected to close around 350 stores worldwide (over half of them located in the US), leaving them with around 450 stores and the online store.
But don’t despair. Even though things aren’t looking too rosy for Forever21, the retailer still seems to be pretty optimistic. “This does not mean that we are going out of business - on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future.”