Forever 21 Has Filed For Bankruptcy

Let’s all declared that 2019 has been the worst year ever for Forever 21. Early September, Ariana Grande sued the company for $10 million claiming they used her song “7 Rings” and a look-alike to promote their merchandise. But before that, Forever 21 was met with controversy in July because they sent diet bars to customers along with their plus-size clothing online orders.

On Sept. 29, Forever 21 sent a letter to all its customers announcing that the company would officially file for bankruptcy after rumors began spreading in August about the company’s contemplation of a debtor-in-possession loan, Elle reports.

Forever 21 filed for chapter 11 which will allow the fast retailer to resume business while it comes up with strategies.

The letter sent by Forever 21 assured its customers that the retailer is not going out of business, instead filing for bankruptcy protection will put the business on a successful track for the future, according to Elle.

But things are not really as positive as Forever 21 makes it look. The New York Times reported that because of the bankruptcy, Forever 21 will end business in 40 countries, including Japan and Canada, and it will closed 178 US stores and another 350 stores globally.

NBC News obtained the documents filed in U.S. Bankruptcy Court where Forever 21 Inc. claims it has liabilities between $1 billion and $10 billion owed to more than 100,000 creditors.

Despite the turbulent waters Forever 21 is currently sailing through, everything is calm on their social media with the company posting about their fall collection.

https://www.instagram.com/p/B3ARRrChsm3/

 

“You will not see any changes in our stores, gift cards will continue to be accepted, and our policies, including returns and exchanges, remain the same,” reads Forever 21 letter to consumers.

The big retailer’s struggles just signal American malls own struggles because many people are opting to buy online. Forever 21 is following the same steps of Sears, Gymboree, Claire’s, Nine West, and the already succumbed, Payless Shoe Source because they all have filed for bankruptcy protection.

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