First Topshop, now this? The company behind iconic teen fashion fave Forever 21 is about to file for bankruptcy, Bloomberg reports, in yet another sign that brick and mortar youth clothing retailers can't keep up in a Depop-driven world.
According to Bloomberg, which did not obtain comment from Forever 21, the company is dealing with significant debt and has been trying to obtain new financing for a while. Those negotiations have stalled, and Chapter 11 is looming, which means a large number of stores are likely set to close.
The implications here are bigger than tube tops and mini skirts. Forever 21 is a major presence in a majority of America's already struggling shopping malls -- those malls will find it difficult to fill empty shopfronts, Bloomberg points out, which means a significant loss of profit. Excluding department stores, Forever 21 is the sixth-largest mall tenant in the country.
Founded by husband and wife business team Do Won Chang and Jin Sook Chang in 1984, Forever 21 has more than 700 stores across the world and around 30, 000 employees. Like many fast fashion retailers it has endured its share of controversies: multiple designers have accused Forever 21 of ripping off specific items of their clothing, and the chain has also come under scrutiny for using Bible verses on logo tees and accessories. Back in the 2000s, some of its weirder design choices were chronicled on the now-defunct blog WTFForever21.