Last night Forever 21 filed for Chapter 11 bankruptcy. In a letter addressed to customers, dated September 29, the brand said that the filing will enable Forever 21 to continue to operate “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.”
This does NOT mean that they are going out of business.
The statement continued, “This does NOT mean that we are 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.”
As part of the filing, the brand has requested approval to close many stores throughout the U.S.: “The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords. 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.”
But the The New York Times reported the brand will close up to 178 stores in the U.S. and “up to 350 overall.”
In a press release, executive vice president Linda Chang said, “This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21.” The pending restructuring means there’s undoubtedly lots of change on the horizon for the fan-favorite, fast-fashion brand that’s been a staple in malls across the globe since 1984.
The brand is no stranger to making headlines, as it’s often come under fire for selling knock-off clothing and accessories, and having poor production practices. Just a few weeks ago, Ariana Grande sued the brand for $10 million, alleging Forever 21 had used photos of her likeness illegally. And the L.A. Times reported on how the brand pays less than minimum wage to its factory workers, and the brand has also been called out by several young designers for plagiarism, including Sandy Liang, who asked, “Are you proud to rip off young designers?”