Forever 21 files for Chapter 11 bankruptcy, plans US store closures

Fast-fashion retailer Forever 21 has filed for Chapter 11 bankruptcy protection in the U.S., the company announced.

F21 OpCo, LLC, along with certain U.S. subsidiaries, submitted the filing in the United States Bankruptcy Court for the District of Delaware on Saturday. The company stated that it plans to begin an “orderly wind-down” of its U.S. business while simultaneously seeking a buyer for its assets.

As part of its restructuring efforts, Forever 21 will conduct liquidation sales at its stores while undergoing a court-supervised sale process. The company has also filed a motion to market its assets through an auction, with the possibility of pivoting to a “going-concern transaction” if a successful sale is secured.

Forever 21’s U.S. stores and website will remain open during the initial phase of the wind-down. The company has filed motions requesting approval to use cash collateral for employee wages and benefits.

Brad Sell, Chief Financial Officer of F21 OpCo, said the decision followed a “strategic review” of the company’s financial situation and cited competition from foreign fast-fashion companies, rising costs, and shifting consumer trends as key challenges. “While we have evaluated all options to best position the company for the future, we have been unable to find a sustainable path forward,” Sell stated.

Forever 21’s international operations, which are managed by licensees, are not included in the U.S. Chapter 11 filings. Authentic Brands Group, which owns the Forever 21 intellectual property, will continue licensing the brand to other operators. International stores and e-commerce platforms will continue operating as usual.

Forever 21, founded in 1984 in California, previously filed for Chapter 11 bankruptcy in 2019 and emerged in 2020. At its peak, the retailer operated about half a thousand stores in the U.S., though its footprint has significantly declined since the previous filing.