Bloomberg announced that the giant fashion retailer Forever 21 is considering filing for bankruptcy. With skyrocketing costs of running brick-and-mortar stores, the brand found itself in financial trouble while struggling to restructure their debt.
Globally, Forever 21 has over 815 stores making it one of the largest retailers with physical locations. As e-commerce brands like Showpo, Zaful, and Lulu’s gain popularity, stores like Forever 21’s attempts at remaining competitive are futile.
According to CNBC, the retailer is contemplating filing for bankruptcy in order to close down “undesirable” locations. Companies such as Barneys and Mattress Firm filed in the past to lower the costs of having so many physical retail locations.
Brick-and-mortar retailers have been filing for bankruptcy left and right, which is affecting mall owners such as Simon Property Group and Brookfield Property Group. Forever 21 is actually Simon’s seventh largest tenant as the company has 99 leases with Simon alone. The CEO of Simon Property Group, David Simon, has said before that he is considering giving financial help to these businesses just to keep their stores open. Three years ago, Simon Property Group helped Aeropostale get out of bankruptcy.
On social media, some blame the bankruptcy on Forever 21’s recently questionable releases, such as their collaboration with Cheetos and the release of an entire line of U.S Postal Service logo apparel. But, they did have some great collaborations as of recent. August 22, they announced their back-to-school collaboration with the popular Y2K brand K-Swiss and earlier in the year, they announced a collaboration with the beloved brand Baby Phat.