- Forever 21 said it would conduct liquidation sales at its stores while at the same time marketing and selling off some or all of its assets.
Fast-fashion retailer Forever 21 filed for bankruptcy over the weekend, but committed to keeping its website and stores open during the process of liquidating its assets and “winding down operations.”
The Sunday, March 16 bankruptcy is the second one Forever 21 has filed, after an earlier bankruptcy process began in 2019. It comes after Forever 21 was unable to find a buyer for its 350 U.S stores, Reuters reported.
In 2020, mall owners Simon Property Group and Brookfield Corporation joined Authentic Brands Groups, a global brand development company, to buy Forever 21 out of bankruptcy and save the retailer from liquidation.
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Forever 21 was among financially struggling apparel retailers — including JCPenney, Brooks Brothers and Aéropostale — that the two mall owners and Authentic Brands teamed up to acquire in recent years, forming a new company called Catalyst Brands.
Forever 21 said it would conduct liquidation sales at its stores while at the same time marketing and selling off some or all of its assets.
According to bankruptcy documents, assets of Forever 21 range from $100 million to $500 million, while liabilities range from $1 billion to $5 billion.
What does bankruptcy mean for a business?
A Chapter 11 bankruptcy does not necessarily mean the company is doomed to go under. It’s a process that some but not all companies survive.
During a bankruptcy process, the company “usually proposes a plan of reorganization to keep its business alive and pay creditors over time,” says the U.S. courts website.
What was Forever 21 up against?
The Forever 21 chain faced headwinds from a “weak apparel market” and competition from a “cheap Chinese marketplace,” Neil Saunders, a retail analyst and managing director of retail at GlobalData, said on Monday.
“Forever 21 was a retailer built for a different era,” Saunders said. “Most of its stores are way too large for its present needs. It is also exposed to too many weaker malls where foot traffic has been under pressure.”
Forever 21 has 15 stores in NJ malls
There are 15 Forever 21 stores in New Jersey, including three in North Jersey. All are in malls:
- Tanger Outlets Atlantic City in Atlantic City.
- Bridgewater Commons in Bridgewater.
- Cherry Hill Mall in Cherry Hill.
- Deptford Mall in Deptford.
- Freehold Raceway Mall in Freehold
- Garden State Plaza in Paramus.
- Hamilton Mall in Mays Landing.
- Menlo Park Mall in Edison.
- Newport Centre in Jersey City.
- Ocean County Mall in Toms River.
- Quaker Bridge Mall in West Windsor.
- Rockaway Townsquare in Rockaway.
- The Mills at Jersey Gardens in Elizabeth.
- Willowbrook Mall in Wayne.
- Woodbridge Center in Woodbridge.
Long list of chains that have reduced operations or closed
Forever 21 joins a long list of brick-and-mortar stores that have recently shut down or drastically curtailed operations, including Joann fabrics, Stop & Shop, Big Lots, Buybuy Baby, Family Dollar, Rite Aid, CVS, Bed Bath & Beyond and Christmas Tree Shops.
This article contains information from Reuters
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: [email protected]; Twitter:@danielmunoz100 and Facebook
