NEW YORK (AP) — Low-price fashion chain Forever 21, a onetime hot destination for teen shoppers that fell victim to its own rapid expansion and changing consumer tastes, has filed for Chapter 11 bankruptcy protection.
The privately held company based in Los Angeles said Sunday it will close up to 178 stores in the United States. Before the bankruptcy filing, the company operated about 800 stores globally, including more than 500 stores in the United States.
The company said it would focus on maximizing the value of its U.S. stores and shutter certain international locations. Forever 21 plans to close most of its outlets in Asia and Europe but will continue operating in Mexico and Latin America.
"The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords," it said in the statement. "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."
Forever 21 joins Barneys New York and Diesel USA in a growing list of retailers seeking bankruptcy protection as they battle online competitors. Others, including Payless ShoeSource and Charlotte Russe, have shut down completely.
The numbers bear out the crisis facing traditional retailers. 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 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 fast fashion chains like H&M and Zara, rode a wave of popularity among young customers that took off in the mid-1990s.
Their popularity grew during the Great Recession, when shoppers sought fashion bargains.
But over the past year or so, fast fashion has fallen out of style. Young customers are losing interest in throwaway clothes and are more interested in buying eco-friendly products. They're also gravitating toward rental and online secondhand sites like Thredup, where they see clothes worn again instead of ending up in a landfill.
These trends are happening while discounters such as Target have spruced up their fashion assortments, stealing away customers.
Forever 21 has been more vulnerable than some other chains because of its large footprints in major malls, which are attracting fewer shoppers.
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