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Forever 21 files for bankruptcy again amid pressure from fast-fashion rivals
The retail chain is winding down US operations after years of struggles, having earlier filed for bankruptcy in 2019
“We’ve 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,” said Brad Sell, finance chief at F21 OpCo that operates Forever 21’s roughly 350 US stores. De minimis refers to the US waiver of standard customs procedures and tariffs on imported items worth less than $800 that are shipped to individuals and helps Chinese online retailers such as Shein and Temu to keep prices ultra-low. “Brick-and-mortar retailers like Forever 21 operate in a highly competitive environment where the cost of doing business is expensive and rising with inflation rates,” Sarah Foss, head of legal and restructuring at Debtwire, which provides data and analytics on leveraged loans.
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