Reports have surfaced that the iconic fast-fashion retailer Forever 21 may have plans to file for bankruptcy. Insiders of the brand’s finances disclosed pivotal information to Bloomberg. Among the reports includes,
“Forever 21 Inc. is scrambling to line up additional financing this month as cash to pay vendors and landlords dwindles to a critical level, according to people with knowledge of the matter.”
The fashion empire reportedly “has about 800 stores worldwide and more than 3 billion dollars in estimated annual sales.” Filing for bankruptcy would help the brand “shed unprofitable stores and recapitalize the business,” as stated by Bloomberg.
The falling of Forever 21 could be a sign of the times. As CNBC reports, most of its stores are located in malls which are seeing less and less traffic these days. Similar brands like TopShop have already filed for bankruptcy and have resorted to shutting down all of their US stores. Although there has been no official word from Forever 21 on whether they are planning on closing down their stores, it’s looking like they will meet the same fate as their competition.
Although bankruptcy isn’t pretty, it doesn’t mean the end. it could be just the technique the business needs for revival while also helping them shed any locations and avenues that are weighing them down. With more and more competition applying pressure as well as an emerging preference for online shopping, even the most staple brands can cease to be relevant.
Do you believe Forever 21 will come out of this financial crisis stronger than ever, or make room for smaller businesses to snatch up their customer base?