Is Forever 21 Closing Stores? The Company Has Filed For Bankruptcy
Long a staple store in shopping malls across the United States, fast-fashion retailer Forever 21 filed for Chapter 11 bankruptcy Sunday. But is Forever 21 closing its stores? In a letter to customers, Forever 21 said that while some stores might be shuttered, its bankruptcy filing didn't mean the company was going out of business. Instead, the fashion retailer said it hopes to operate as usual while reorganizing business to return to profitability.
"Today, Forever 21, Inc. voluntarily filed for bankruptcy protection under chapter 11 of the U.S. Bankruptcy Code," the company revealed in a letter to customers. "This does NOT mean that we are going out of business — on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future."
While the company is looking to close some Forever 21 locations within the United States, it is not immediately clear where those closures will happen. Worldwide, Forever 21 is reportedly planning to close somewhere between 300 and 350 stores, with "as many as 178" of those being in the United States, according to CNN. Currently, the company reportedly has more than 540 stores spread across the United States, CNN noted.
In its letter to customers, the company sought to reassure customers that although it had "requested approval to close a number of stores" in the United States, it expected "a significant number of these stores will remain open." What's more, decisions regarding which stores to close were reported to still be "ongoing, pending the outcome of continued conversations with landlords," the company's letter read.
"Most importantly, our stores are open and it will continue to feel like a normal day – 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," the company said.
But while Forever 21 fans in the United States may not find that the doors of their nearest store are closing, shoppers in other parts of the world may not be so lucky. According to Bloomberg, Forever 21 has said it plans to close all of its stores in Canada and exit most outlets in Asia and Europe.
By filing for bankruptcy protection, Forever 21 joins companies like Sears, Gymboree, Claire's, Nine West, and Payless Shoe Source. Although all were once considered to be staple stores in shopping malls across the United States, they (and dozens of other retailers) have struggled as more and more consumers turn to online shopping, according to NBC News.
But while some retailers, like Payless, have closed completely, Forever 21 said Sunday that it was "confident this is the right path for the long-term health of our business." In fact, the company told customers it believed a reorganization would enable it to return "a stronger, more viable company that is better positioned to prosper for years to come."
You can keep up to date with which stores are open via the company's online store locator tool.