Los Angeles, California-based Forever 21, a retailer of casual young-adult fashions, has announced a major restructuring of its global clothing chain. The company has filed for chapter 11 bankruptcy and plans to close up to 178 stores in the United States and others in Europe and Asia with a corresponding layoff of hundreds of employees.
In a statement to customers, the company explained:
“Forever 21, Inc. voluntarily filed for bankruptcy protection under chapter 11 of the U.S. Bankruptcy Code. Essentially this allows Forever 21 to continue to operate its stores as usual, while the Company takes positive steps to reorganize the business so we can return to profitability and refocus on delivering incredible styles and fashion you love for many years to come. 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.
Most importantly, our stores are open and it will continue to feel like a normal day – you will not see any changes in our stores, gift cards will continue to be accepted, and our policies, including returns and exchanges, remain the same.
As part of our filing, we have requested approval to close a number of stores across the U.S. The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords. We do however expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the U.S.
We are confident this is the right path for the long-term health of our business. Once we complete a reorganization, Forever 21 will be a stronger, more viable company that is better positioned to prosper for years to come. We look forward to continuing to provide you with the great service and curated assortment of merchandise that you expect from us. We truly appreciate your continued support and loyalty. We hope to see you again soon!”
Published reports suggest that quality issues may have impacted Forever 21…
“If Forever 21’s bankruptcy signals an end to fast fashion styles and shoddily manufactured trend pieces, then the closing of 350 stores worldwide will be worth it. One of several clothing outlets that showcase poorly made clothes sewn together with sloppy seams, not enough fabric for even the most minor alteration, no extra buttons, and zippers that hitch at every metal tooth, Forever 21 contributes to the vast international textile waste stream as well as women going out into the world looking poorly put together at best.”
“Fast fashion is a retail term for factory-produced, mass-market, inexpensive clothing that captures the latest trends as soon as they step off the catwalk. It isn’t just the speed from runway to rack that signifies fast fashion, but how fast it moves from closet to trash heap. In biting the look without matching the quality, low-end, high-volume retailers beat the high-end fashion houses in availability and price.” Read more …
Does this mean that other retailers operating in this space, especially the so-called outlet stores for major brand labels are also at risk?
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?