Popular clothing retailer Forever 21 has just filed for bankruptcy, Bloomberg reports. The newest filing is just another in the long list of retail behemoths that have struggled to adapt in recent years, in what Bloomberg is calling the “retail apocalypse.”
Once one of the most popular fast-fashion retail chains in the world, the company had struggled as its millennial market aged out and it failed to win the loyalty of Gen Z consumers. In addition, the near-ubiquity of online shopping has eaten away into its profits. It currently has over 800 stores across the globe, though their future now remains unclear.
The bankruptcy papers, which were filed in Wilmington, Delaware, shows the liabilities that the company is currently saddled with comes to between $1 billion and $10 billion. It is the company’s hope that it can continue to stay open as it works out a deal with its creditors — and a strategy to rebound back into profitability.
Part of its strategy is to close all international locations in Europe and Asia. Locations in Latin America and the United States will reportedly remain open.
Forever 21 will be able to continue to operate thanks to a hefty investment from JPMorgan Chase & Co., which offered the company $275 million in lending. In addition, TPG Sixth Street Partners is lending $75 million.
“The financing provided by JPMorgan and TPG Sixth Street Partners will arm Forever 21 with the capital necessary to effect critical changes in the U.S. and abroad to revitalize our brand and fuel our growth, allowing us to meet our ongoing obligations to customers, vendors and employees,” executive vice president of Forever 21 Linda Chang, said in a statement.
In addition to closing a number of international locations, Forever 21 will likely begin to close unprofitable stores. This comes as bad news for malls, as Forever 21 remains one of the largest clients of mall space, and is the sixth-largest tenant for Simon Property Group, outside of department stores.
Bloomberg reports that a slew of bankruptcies has emptied more than 12,000 stores in the past two years. Experts are pessimistic that they will be easy to refill, as the death of the American mall continues.
Meanwhile, the news of Forever 21’s bankruptcy has spread like wildfire around social media and is currently trending on Twitter.
Many users particularly expressed their excitement for going-out-of-business sales.
forever 21 is filing for bankruptcy y'all know that means major sales and I'm about to have a whole new wardrobe ????— jennie lou ◟̽◞̽ (@28tommos) September 30, 2019
kind of looking forward to the forever 21 closing sale but the whole store will probably look like the sale section so I need to start mentally preparing now— em (@daedrx) September 30, 2019
Forever 21 is going bankrupt, time to buy everything in my shopping cart ????— BRIT-KNEE (@britney_n9) September 30, 2019
Another user lamented that she had only just gotten a job as a cashier at the store a month ago, and was worried about her job prospects.
Meanwhile, rival Amazon is also potentially looking at its own shakeup, as regulators begin to target big tech, including Jeff Bezos’s company, per The Inquisitr.