Forever 21 files for Chapter 11 bankruptcy

NEW YORK (AP) — Low-price fashion chain Forever 21, a once-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.

As of the bankruptcy filing, the company operated about 800 stores globally, including more than 500 stores in the U.S.

The company said it would focus on maximising the value of its U.S. stores and shutter certain international locations.

Forever 21 plans to close most of its locations 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 on a growing list of retailers seeking bankruptcy protection as they battle online competitors.

Others, like Payless ShoeSource and Charlotte Russe, have shut down completely.

But over the last year or so, fast fashion has fallen out of style.

Young customers are losing interest in throw-away clothes and are more interested in buying eco-friendly products.

They’re also gravitating toward rental and online second-hand sites like Thredup, where they see clothes worn again instead of ending up in a landfill.

These trends are happening while discounters like Target have spruced up their fashion assortments, stealing away customers.

Forever 21 has also been more vulnerable than some other chains because of its large footprints in major malls, which are attracting fewer shoppers.

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