Forever 21 has filed for Chapter 11 bankruptcy protection. On Sunday, Sept. 29, the company filed a letter to shoppers stating, “Once we complete a reorganization, Forever 21 will be a stronger, more viable company that is better positioned to prosper for years to come. We look forward to continuing to provide you with the great service and curated assortment of merchandise that you expect from us.” 98.1 Minnesota’s New Country
Forever 21 is using this bankruptcy protection as a step to reorganize their brand and management to bring success in the future. After rapidly expanding to 47 countries over six years, it caused complications for the organization. The company plans to close many Asian and European locations and up to 178 stores in the U.S. Their online store will remain up and running.
The founding of Forever 21 is a classic story of the American dream. Husband and wife, Jin Sook and Do Won “Don” Chang, emigrated from South Korea to America with plans to open their own business. After noticing that all of the wealthy people in Los Angeles were in the garment business, the couple opened a clothing store in 1984. By 2015, 600 stores were making $4.4 billion in sales. Forbes
Many credit Forever 21 with the beginning of the fast fashion trend, for they were the first company to take looks straight from the runway and create an affordable piece for the average mall patron in the early 2000s. What previously took months to trickle down from the rich to the average buyer soon took sometimes days to get in those bright yellow bags that exit hundreds of Forever 21 locations around the globe. This speed of their business model and market strategy was not without consequence, though. Many factory workers filed wage claims to state labor departments for poor working conditions, and several lawsuits were filed based on trademark infringement of other products and brands like Ariana Grande and Gucci. CBS This Morning
Don’t worry, some other well-known brands have filed for Chapter 11 bankruptcy too, like the Chicago Cubs, General Motors, and Chrysler. Companies file for Chapter 11 bankruptcy because it allows the business to attempt to become profitable again. Day-to-day operations continue, giving the organization the opportunity to fix internal problems. But be on the lookout, stores on the chopping block in Colorado include the locations at Flatiron Crossing Mall and the Orchard Town Center. Daily Mail