The California-based fashion chain Forever 21 which has made remarkable contribution in proliferating the trend of “fast-fashion” has filed for Chapter 11 bankruptcy. Forever 21 closing stores in various international location due to declining sales. Vice President of the company Linda Chang informed the New York Times that brand would soon close its stores in most of the international location of Europe and Asia. The retailer is expected to shut down 250 stores across the globe. It would also include 178 under performing stores in the US.
Under Chapter 11 bankruptcy, companies are allowed to reorganize their debts, assets, and business affairs. Moreover, the companies also get time to sell the parts of the business. Forever 21 has taken this move as the brick-and-mortar players of the brand are struggling against increasing competition from the online rivals.Forever 21 has requested the approval to shut down 178 stores in America. Moreover, the company has decided to pull out the business from Japan by October as a result of continued sluggish sales.
Forever 21 was founded in the year 1984 as a fast-fashion brand along with other retailers like Zara and H&M. The popularity of the brand increased during the period of the Great Recession when consumers sought fashion bargains.
Nevertheless, in the past few years, the trend of fast fashion faded which has lead to Forever 21 closing stores. With increasing environmental-awareness among young customers, they are losing interest in throw-away clothes. At present, customers are fascinated towards buying eco-friendly clothes.
Another reason for vulnerability Forever 21 as compared to its competitors is its large footprints in the prime malls, which is leading the shoppers to lose interest in the brand.