Hi guys! Where do you usually shop nowadays? Just off the top of your head, what are the few brands that come into your mind? H&M, Uniqlo, maybe Cotton On, Pull & Bear, Zara? These fashion brands are certainly no stranger, and are favoured by many of us nowadays. However, once upon a time, this place of honour belonged to none other than Forever 21. Now, Forever 21 is one of the latest fashion brands to potentially file for bankruptcy.
The Rise of Forever 21
Forever 21 was founded by Do Won Chang and Jin Sook Chang, and it first opened back in 1984. Based in LA, Forever 21 soon rose as an empire, opening stores nationwide and worldwide rapidly. As a teenage fashion brand with affordable prices, Forever 21 attracted crowds everywhere. Currently, Forever 21 has more than 815 stores worldwide, and this has become a problem in itself.
Too Many Stores?
Having many stores worldwide and establishing yourself as a major player may sound like a dream, but this dream is turning into a nightmare. As with everything else, the fashion industry is also constantly moving forward, and there are so many other brands coming up as fierce competitors. Besides that, more and more people are inclined to shop online instead of heading out, and this is Forever 21’s downfall. There’s been reduced foot traffic at malls due to both these factors, and it’s becoming increasingly difficult to make sales and attract customers. In April, they even pulled out of China completely, while closing down several stores worldwide.
At the moment, Forever 21 is looking into restructuring options, even as it consideres filing for bankruptcy. They are in talks with private equity firm Apollo Global Management about raising debtor-in-possession (DIP) funding, in case it decides to file for bankruptcy. It is looking to shore up its liquidity, and allow Do Won Chang to continue leading the company. However, Forever 21 has not made a concrete decision to file for bankruptcy, according to latest updates.
The fashion industry is facing some uncertainty now, especially with fashion behemoths once thought to be invincible. Just recently, Gap, Victoria’s Secret, American Apparel and Topshop found themselves having trouble keeping afloat. For now, we’re not sure what will happen to Forever 21 stores in Malaysia, but to be safe, you could start picking up your favourite pieces now! Who knows, you may find a great deal whilst walking down memory lane!