Popular American retail, Forever 21 which was once known for “fast fashion,” has officially made plans to file for bankruptcy amid ongoing reports of financial troubles. This comes as a sign of the eroding power of shopping malls and the shifting tastes of young consumers, according to The New York Times.
Forever 21 saw sales plunge to $3.3 billion last year from $4.4 billion in 2016. It‘s exiting 40 countries and closing up to 178 stores in the U.S., where it’s a huge mall tenant.
The private, family-held company capped months of speculation about its restructuring efforts by saying that it would cease operations in 40 countries, including Canada and Japan, as part of a Chapter 11 filing. It will close up to 178 stores in the United States and up to 350 overall.
Forever 21 said that it would continue to operate its website and hundreds of stores in the United States, where it is a major tenant for mall owners, as well as stores in Mexico and Latin America.
“What we’re hoping to do with this process is just to simplify things so we can get back to doing what we do best,” Linda Chang, the chain’s executive vice president, said in an interview. Ms. Chang’s parents, Do Won and Jin Sook Chang, who still run the chain, founded Forever 21 in the 1980s after immigrating to California from South Korea.