Fashion Store Forever 21 Files For Bankruptcy
Forever 21 will be closing stores across 40 countries.
In an open letter to customers, Forever 21 said it has "voluntarily filed" for bankruptcy in the United States, and will reorganise the business for the long term.
"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," it said.
However, the company stressed this does not mean it will be 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," it said.
Forever 21 currently has more than 600 stores around the world, but would be looking to close up to 178 stores in 40 countries.
It will also continue to honour gift cards, and returns and exchange policies will continue as normal.
"Our stores are open and it will continue to feel like a normal day – you will not Osee any changes in our stores," the company said.
Forever 21 hopes the reorganisation will help the brand become a "stronger" and "more viable" business for the future.
The brand launched multiple stores in Australia from 2014 but all have since shut.
So far this year, publicly traded U.S. retailers have announced they will close 8,558 stores and open 3,446, according to the global research firm Coresight Research. That compares with 5,844 closures and 3,258 openings in all of 2018.
Coresight estimates the store closures could number 12,000 by the end of 2019.
Forever 21 was founded in 1984 and, along with other so-called fast fashion chains like H&M and Zara, rode a wave of popularity among young customers that took off in the mid-1990s.
The company's popularity grew during the Great Recession, when shoppers sought fashion bargains.
But over the last year or so, fast fashion has fallen out of style. Young customers are losing interest in throw-away clothes and are more interested in buying eco-friendly products.
- With CBS News