Los Angeles-based fast fashion retailer F21 Opco, the licensee of Forever 21 in the U.S., said it will wind down its U.S. businesses while pursuing a going concern transaction or a sale of some or all of its assets. The company has filed for Chapter 11 protection in U.S. Bankruptcy Court for the District of Delaware, its second filing in six years.
“While we have evaluated all options to best position the company for the future, we have been unable to find a sustainable path forward, given competition from foreign fast fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends,” said F21 OpCo CFO Brad Sell. “As we move through the process, we will work diligently to minimize the impact on our employees, customers, vendors and other stakeholders.”
All stores will remain open while the bankruptcy process runs its course. In the event of a successful sale, the company may pivot away from a full wind-down of operations to facilitate a going-concern transaction.
The Chapter 11 filing does not affect Forever 21 stores outside the U.S., which are operated by other licensees. Additional information about bankruptcy proceedings may be accessed here.
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