“Forever 21, the once “fast-fashion powerhouse” filed for Chapter 11 bankruptcy on Sunday, September 29 and will be closing up to 178 stores and as many as 350 globally, according to a representative of the company as reported by buisnessinsider.com.
Chapter 11 bankruptcy usually means that a company is trying to reorganize to figure out their money situation as unitedstatescourts.com explains. This happens regularly with businesses, according to investopedia.com. This is Forever 21’s plan.
“What we’re hoping to do with this process is just to simplify things so we can get back to doing what we do best,” Linda Chang, the chain’s executive vice president, stated in an interview with The New York Times.
The business’s ‘finesse ‘started to wear off when other stores came along, such as,H&M, and caused a bit of competition, explains The Los Angeles Times . The source businessinsider.com added, “As a result, Forever 21 started to lose touch with its core customers, while competitors like H&M and Zara rose.”
In July, when the company started to consider bankruptcy, according to The New York Times, “Forever 21, which said e-commerce made up 16 percent of its sales, saw its revenue drop to $3.3 billion last year, down from $4.4 billion in 2016.”
Husband and wife, Jin Sook and Do Won Chang, came from South Korea in 1981, hoping to start a business. One source, businessinsider.com, states that, “In 1984, the couple opened a 900-square-foot clothing store in Los Angeles called Fashion 21, the predecessor to Forever 21.” Soon enough the business took flight. By the end of their first year, they had pulled $700,000 in sales.
“The bankruptcy filing doesn’t seem to be its end; it could mean more time to plan for a second chance at forever,” as vox.com assures us. After all, US Magazine states that Forever 21 did write in a letter to their customers saying, “Once we complete a reorganization, Forever 21 will be a stronger, more viable company that is better positioned to prosper for years to come.”