Fashion chain Forever 21 has filed for Chapter 11 bankruptcy protection. The privately held company based in Los Angeles said Sunday it will close up to 178 stores in the U.S. According to the bankruptcy filing, the company operates about 800 stores globally, including more than 500 stores in the U.S. Forever 21 said it would focus on maximizing the value of its U.S. stores and shutter certain international locations. Forever 21 plans to close most of its locations in Asia and Europe, but will continue operating in Mexico and Latin America.
"The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords," Forever 21 said in a company press release. "We do, however, expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the U.S."
Total Retail: So, I guess Forever 21 won't be forever, after all. The fast-fashion company, which was founded in 1984 , rode a wave of popularity among young customers that took off in the mid-1990s, and its popularity grew during the Great Recession, when shoppers sought fashion bargains. But over the last year or so, fast fashion has fallen out of style as an increasing number of millennials opt for purchasing eco-friendly products and gravitate toward rental and online second-hand sites like thredUP. Forever 21 has also been more vulnerable than some other retail chains because of its large footprint in shopping malls, which are attracting fewer shoppers. Forever 21 joins the ranks of other well-known retailers that have declared bankruptcy this year, including Barneys New York and Diesel USA. Others like Payless ShoeSource and Charlotte Russe have ceased operations completely. The numbers bear out the crisis facing traditional brick-and-mortar retailers. So far this year, publicly traded U.S. retailers have announced they will close 8,558 stores and open 3,446, according to research firm Coresight Research. That compares with 5,844 closures and 3,258 openings in all of 2018. Coresight estimates the store closures could number 12,000 by the end of 2019.