Forever 21 Store Elings accelerated because of the competition from Shein and TEMU

Hundreds of American stores 21 to forever By the end of March, it will be closed after overwhelming years of economic pressures and unimaginable competition in the fast fashion space.

F21 OPCO, Forever 21 Stores and brand licensed in the United States, submit a request to protect bankruptcy in the bankruptcy court for Dillauer Province for the second time in six years on Sunday.

Forever 21, the remaining stores are likely to be closed with the second bankruptcy approaching

“We were unable to find a sustainable path forward, given a competition from foreign fast fashion companies, which managed to benefit from exempt from the minimum to undermine our brand on prices and margin, as well as high costs, Economic challenges F21 OPCO CFO Brad Sell said in a statement that the influence on our primary customers and advanced consumer trends.

The company said while it finishes its American operations, it continues to search for a buyer for some or all its assets. Sarah Vos, a bankruptcy expert and legal head of Debtwire, believes that it is unlikely a white knight to buy all retail sites or part of the retail sites. ”

According to court documents, the store closing is already ongoing with the first wave of Forever 21 performances closed by March 30 week.

According to court documents, the closure will affect about 236 stores who will be affected during the first wave of closure because the company says that “it is unlikely that any third party is interested in obtaining these sites as part of the treatment of constant anxiety.” The remaining stores are expected to close their doors forever by May 1.

Moderate retail sales in the United States in February

Foss highlighted how the fast retail series continued to face challenges since its first trip through bankruptcy in September 2019, when the company closed more than 100 stores 534 and sold the rest to a consortium from buyers.

Forever 21 Group Group and Simon Property Group created a joint project, Sparc Group, to keep the company alive in 2019. In January, Sparc Group cooperated with JCPENNEY to form a new organization, Catalyst Brands.

The retail seller joins the low -cost commodity stores in the field of retail, sewing and retail handicrafts, all of which have been protected again. There have been 20 files from Chapter 11 since the beginning of 2024, but 25 retail chains had at least bankruptcy files since 2016, according to Debtwire data.

“Forever 21 in a highly competitive retail environment where the cost of practicing business is expensive and high inflation rates,” Low -cost online retailers Like Shein and TEMU who are able to benefit from the minimum exemption that exempts goods whose value is estimated at $ 800 of import duties and definitions. ”

Shein and TEMU offers a range of products and clothes at low prices. Companies face criticism on work practices, environmental concerns, and work ethics such as violation of intellectual property.

John Mercer, Head of World Research for Coresight Research, also highlighted how competitive pressures from these fast fashion platforms, which have risen in recent years, for example Inflationary consumers It took advantage of its cheap prices, and it will continue to lead to increased retail closure in 2025.

The company estimated that there would be 15,000 closure this year. The company also expected about 5800 stores in the country this year, but it leads to a net loss.

Get Fox Business on the Go by clicking here

However, Foss said this does not mean the end of the company.

Foss said the company’s brand and intellectual property, owned by a company affiliated with the original brand group, is not part of bankruptcy and will live in some way.