Multiple market dynamics compelled Forever 21 to file for bankruptcy and close its stores. In Nashville and around the world, it was once a preferred fashion outlet. Amid the store closing and liquidation sales, 504 Opry Mills Dr, Nashville, will be closed soon. Across the U.S., Forever 21 will close stores in other locations as well.
Highlights
- Foreign competitors, rising costs, and falling sales became the reason for Forever 21’s downfall.
- The store located in Nashville will close among more than 300 stores scheduled to close in the U.S.
- The company filed for bankruptcy earlier in 2019. Now, it has again filed for it with a debt of $1.58 billion.
Forever 21 Files for Bankruptcy Protection
Founded 41 years ago, the brand is now set to close permanently (Source – Google Reviews)
Forever 21 will start winding down its operations across the country. The company has filed for Chapter 11 of bankruptcy on March 16, 2025. It is set to close 359 stores in total. Website and offline stores will remain operational for the time being. People can access their nearby stores for the last time before they bid farewell.
Reasons Leading to Closure
Whenever a company files for bankruptcy, there are a lot of piled-up reasons behind it. For a long time, Forever 21 has been leading in fashion retail. But now the sales have fallen drastically and as compared to last month, only a rise of 0.2% has been observed.
On Sunday, the operator of the company’s U.S. unit revealed that a lot of factors are responsible for the shutdown. Evolving fast-fashion rivals, an increase in e-commerce, especially Shein and Temu, and economic challenges are some of the major factors. Not only Forever 21 but other consumer brands have also raised the concern regarding slower growth. Even the hiring process in this industry has faced a flatline.
Sarah Foss, global head of legal at the financial firm Debtwire pointed out one more reason for high foreign competition. The U.S. offers a “de minimis” exemption on the import of goods less than $800. Under this, these products sail in with few import duties and inspections. The government had taken steps to curb these loopholes, but last month all changes were put on pause.
Cheap Chinese goods covered the retail market once again by overseas online delivery and the existing stores such as Forever 21, Joann Fabrics, and more have to face the consequences.
The Journey of Forever 21
In 1984, Korean immigrants founded the company with its former name ‘Fashion 21.’ the first store was opened in Highland Park. F21 OpCo was the retailer’s parent company and operator. Forever 21 soon gained traction and its sales were more than $4 billion in 2015. During this time period, online retailers with cheap fast fashion also started coming on the front foot.
The brand relied on foot traffic in physical stores and advancing e-commerce struck them hard. The number of customers started falling and in 2019 the company filed for bankruptcy in the hope of efficient operations. It was taken over by ‘Authentic Brands’ and before the conditions could improve significantly, Covid-19 pandemic came as another big hit.
Youth was once a fan of Forever 21, but current conditions show that they have clearly moved on from it. Amid the bankruptcy, the brand listed assets between $100 million and $500 million, a debt of $1.58 billion and other anticipated liabilities.
