The youth fashion brand said that it was winding down operations due to competition from fast-fashion, financial challenges and changing consumer trends.
Forever 21, a mall staple known for its youth-centric fashion focus, is set to close U.S. stores as it files for bankruptcy for a second time, impacting more than a dozen locations in Illinois.
F21 OpCo, which runs Forever 21 stores, said late Sunday that it will wind down the business in the U.S. under Chapter 11 bankruptcy protection while determining if it can continue as a business with a partner, or if it will sell some or all of its assets.
“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,” Chief Financial Officer Brad Sell said in a statement.
Will there be sales for shoppers and which stores will close in Illinois?
Here's what to know:
When is Forever 21 shutting down?
No timeline has been given so far, but the company said in a press release it aims to "move through the chapter 11 process as quickly and efficiently as possible."
Local
Forever 21 said its stores and website will remain open "as the company begins its process of winding down operations."
The company noted that "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."
Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly Chicago Catch-Up newsletter.
The retailer's locations outside of the U.S. are run by other licensees and are not included in the bankruptcy filing. International store locations and websites will continue operating as normal.
Authentic Brands Group owns the international intellectual property associated with the Forever 21 brand and may license the brand to other operators, F21OpCo said.
How many Forever 21 stores are in Illinois?
Aurora
- Fox Valley Mall: 1068 Fox Valley Center Dr.
- Chicago Premium Outlets: 1650 Premium Outlet Blvd.
Champaign
- Market Place Shopping Center: 2000 N Neil St.
Chicago
- Water Tower Place: 835 N Michigan Ave.
Chicago Ridge
- Chicago Ridge Mall: 191 Chicago Ridge Mall Dr.
Fairview Heights
- St. Clair Square: 134 St Clair Square
Gurnee
- Gurnee Mills: 6170 West Grand Ave.
Lombard
- Yorktown Center: 300 Yorktown Center
Norridge
- Harlem Irving-Plaza: 4146-E North Harlem Ave.
North Riverside
- North Riverside Park Mall: 7501 West Cermak Rd.
Northbrook
- Northbrook Court: 2270 Northbrook Court
Orland Park
- Orland Square Mall: 288 Orland Square Dr.
Rosemont
- Fashion Outlets of Chicago: 5220 Fashion Outlet Way
Schaumburg
- Woodfield Mall: 5 Woodfield Mall
Skokie
- Westfield Old Orchard: 4999 Old Orchard Center
Will there be closing sales?
Forever 21 stores in the U.S. will hold liquidation sales and the website will continue to run while operations wind down.
"On behalf of the Company, I’d like to express our deep appreciation for the hard work of our dedicated employees and their commitment to our customers," Sell's statement read. "We are also grateful for the many years of support from our partners and our loyal customers, who have allowed us to serve as a fashion industry leader and go-to retailer for generations.”
What is the de minimis tax exemption?
The de minimis tax exemption lets shipments headed to U.S. businesses and consumers valued at less than $800 to enter the country tax free and duty free.
What to know about Forever 21
Forever 21 first filed for bankruptcy protection in 2019. It was acquired by a consortium of parties including Authentic Brands Group and mall owners Simon Property Group and Brookfield Property Partners.
Forever 21 was founded in 1984 and, along with other fast-fashion chains like H&M and Zara, rode a wave of popularity among young customers in the mid-1990s. Their popularity grew during the Great Recession, when shoppers were seeking bargains. But Forever 21 went on an aggressive expansion just as shoppers were moving more online.
Neil Saunders, managing director of GlobalData, said in a statement that part of the problem now is that Forever 21's stores are too big for its current needs and it's in malls with not enough foot traffic.
“Forever 21 was always a retailer living on borrowed time. Over recent years it has been hit with dual headwinds from a weak apparel market and stiff competition from cheap Chinese marketplaces,” he said. “Both things have eroded its standing and depleted its market share.”
