Forever 21 has filed for Chapter 11 bankruptcy.
The fast-fashion giant made the announcement on Sunday night, the news of which was first reported by the New York Times and was what many in the retail industry had been expecting for weeks.
'This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21,' Linda Chang, Executive Vice President of Forever 21, Inc. said in a statement.
Through the move, the company aims to facilitate a global restructuring that will allow it to focus on a profitable core part of its operations. As part of this restructuring strategy, it will shut most of its international locations in Asia and Europe but will continue operations in Mexico and Latin America. Under bankruptcy protection, stores that make a lot of losses can be closed and it is easier to carry out a reorganization.
According to the filing, Forever 21 Inc has requested the (United States Bankruptcy Court for the District of Delaware) approval to close as many as 350 stores globally, with up to 178 being in the U.S. However, its e-commerce operation will continue as usual.
The American fashion chain which is based in Los Angeles has more than 800 stores worldwide. That number was a lot higher years ago since Forever 21 had to close many branches after falling on hard times in recent years.
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