Seems like the shopping scene is surely changing as brick-and-mortar empire Forever 21 files for bankruptcy, succumbing to e-commerce platforms.
What was once the go-to for both the young and old to buy affordable trendy clothing has finally succumbed to e-commerce platforms’ “retail apocalypse“—a term used describing how the internet changes consumers’ shopping behavior. Hence, this has significantly contributed for the company to file chapter 11 bankruptcy, following the steps of a handful of big US retailers like the Sears Holdings Corp. and Toys ‘R’ Us.
There has been months of speculations that the retail giant was in talks with advisers and lenders to restructure its debt in June this year. But the family-held company finally announced that it would already cease operations to 800 stores in Europe and Asia, and 178 stores in the US.
Although this may be, Forever 21 reiterated in a statement that they “do, however, expect a significant number of these stores [to] remain open and operate as usual. We do not expect to exit any major markets in the U.S.” In addition, the fashion brand said it will continue operations in Mexico and Latin America.
According to Reuters, the Forever 21 “received $275 million in financing from its existing lenders with JPMorgan Chase Bank, N.A. as agent, and $75 million in new capital from TPG Sixth Street Partners, and certain of its affiliated funds.”
As part of the chapter 11 filing, Forever 21’s executive vice president Linda Chang explained in a news release that it is “an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21.”