Price pressures and high costs push Forever 21 into chapter 11
Los Angeles-based fashion brand Forever 21 has said undercutting from overseas-based fast-fashion companies, as well as rising costs, economic challenges and evolving consumer trends, have combined to push it into chapter 11 bankruptcy-protection measures.
Chief finance officer of Forever 21, Brad Sell, said the company had carried out a strategic review and had “evaluated all options” for the company’s future, but had been “unable to find a sustainable path forward”.
Chapter 11 means the company will continue to operate for now, with its lenders waiting for repayment of loans and a court-supervised process for selling some of its assets goes ahead.
If it can, the company said it would like to sell Forever 21 as a going concern. If it is unable to achieve this, it will use chapter 11 to put in place what Brad Sell called “an orderly wind-down of operations”.
He added: “We will work diligently to minimise the impact on our employees, customers, vendors and other stakeholders.”
