Forever 21 will continue operating its website and stores while winding down operations and seeking a buyer for some or all of its assets, according to a statement from its operator. Court filings indicate that stores have been instructed to host liquidation sales of remaining stock, though international stores remain unaffected. The retailer currently operates around 350 stores in the U.S., down from over 530 in 2019. Regulatory filings reveal plans to lay off more than 350 employees in April as the Los Angeles headquarters closes, with further job losses expected as stores shut down. Business bankruptcies were already increasing before Trump’s trade policies impacted the economy, hitting low-cost retailers like Forever 21 particularly hard due to higher interest rates, inflation-weary consumers, and changing shopping habits. Retail sales increased by only 0.2% in February, below analyst expectations, while consumer sentiment dropped 11% in March to its lowest level since November 2022. James Sowka, an attorney at Seyfarth Shaw, anticipates continued Chapter 11 activity this year as companies adjust to economic changes, including uncertainty around tariffs and higher borrowing costs. In a statement, F21 OpCo CFO Brad Sell noted Forever 21’s struggles to compete with foreign fast-fashion brands and absorb rising costs, as well as challenges faced by customers and evolving consumer trends. Court filings estimate the company’s assets between $100 million and $500 million, with liabilities between $1 billion and $10 billion. — news from The Washington Post
