Retailer Forever 21 files for bankruptcy for second time

Forever 21’s locations outside of the United States are operated by other licensees and aren’t included in the filings

Forever 21’s US retail operator has filed for bankruptcy after being hit by rising inflation and intense competition in the fast-fashion sector, the second time the brand has entered Chapter 11.

Forever 21 stores, which have attracted droves of young women since the 1980s for its cheap, trendy clothing, were hurt by the rising cost of inventory and wages in recent years, its co-chief restructuring officer said in a filing to the US court. Competition from online retailers such as Temu and Shein also put pressure on the company.

With cost-saving initiatives failing to make up for significant losses, US operator F21 Opco filed for Chapter 11 bankruptcy in Delaware with around $1.58 billion in total funded debt, the filing said. Forever 21’s locations outside of the United States are operated by other licensees and aren’t included in the filings.

The move comes as US firms Village Roadshow Entertainment Group and Brightmark Plastics Renewal also filed for bankruptcy protection, and follows a tumultuous week for markets rocked by President Donald Trump’s escalating trade wars. Concern over the health of the economy drove high-yield corporate credit spreads to levels last seen in August, while a series of blue-chip borrowers postponed their debt sales.