F21 OpCo LLC, the operator and licensee of the Forever 21 stores in the US, announced on Sunday that it was filing for Chapter 11 bankruptcy.
F21 OpCo is responsible for 350 US-based Forever 21 stores. The company stated that its retail locations and website will remain open while it conducts liquidation sales at its stores and conducts a court‑supervised sale and marketing process for its assets
“Following the conclusion of our strategic review and after careful deliberation, we made the decision to file for Chapter 11 to implement a court-supervised marketing process to solicit a going concern transaction, and, in the absence of such an arrangement, an orderly wind down of operations,” said Chief Financial Officer Brad Sell. “While we have evaluated all options to best position the company for the future, we have 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, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends. As we move through the process, we will work diligently to minimize the impact on our employees, customers, vendors and other stakeholders.”
The Forever 21 trademark and intellectual property are owned by Authentic Brands, which licenses them to F21 OpCo, which itself is a unit of Catalyst Brands. Authentic Brands’ will retain ownership of the Forever 21 brand during the bankruptcy process and would have the option to license the Forever 21 brand to other retailers regardless of a potential sale or retail asset liquidation.
Forever 21 first filed for bankruptcy in 2019, with Authentic Brands gaining ownership in 2020 in a partnership with Simon Property Group and Brookfield Properties.
Photo by BargainMoose / Wikimedia Commons
