Forever 21 files for bankruptcy, to shut stores in Asia and Europe

Forever 21 once had over 800 stores in 57 countries. File pic/AFP

New York: Low-price fashion chain Forever 21, a one-time 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 firm based in Los Angeles said on Sunday it will close up to 178 stores. Founded in 1984, Forever 21 has 815 stores in 57 countries. According to a Bloomberg report, the firm plans to shut most of its stores in Asia and Europe. However, it will continue operations in Mexico and Latin America, the report added.

The Chapter 11 filing allows Forever 21 to continue working even as it chalks out a strategy to pay its creditors and turn around the business, added the report. "The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords," it said in a statement. "We do, however, expect a significant number of these stores to remain open and operate as usual, and we do not expect to exit any major markets in the US."

Forever 21 joins Barneys New York and Diesel USA in a growing list of retailers seeking bankruptcy protection as they battle online competitors. Others like Payless ShoeSource and Charlotte Russe have shut down completely.

The numbers bear out the crisis facing traditional retailers. So far this year, publicly traded US 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 all of 2018. Coresight estimates the store closures could number 12,000 by the end of 2019.

815
Total no. of stores firm has in 57 nations

178
No. of stores the company will close

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