Forever 21, which had expanded to Myeongdong... Second bankruptcy in 6 years

Interior view of the Korean 'Forever 21' store at the time of closure following the global headquarters' bankruptcy in October 2019. The operator of Forever 21 filed for a second bankruptcy on the 16th (local time), six years later. Photo by Cha Min-young

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The fast fashion brand 'Forever 21,' which once boasted global prominence and even expanded into Myeongdong, South Korea's fashion hub, has filed for bankruptcy for the second time. This comes about six years after its first bankruptcy filing in 2019 and subsequent acquisition by a private equity firm.

On the 16th (local time), Bloomberg reported that Forever 21's operator, F21 OpCo, submitted a bankruptcy petition under Chapter 11 of the U.S. Bankruptcy Code to the federal bankruptcy court in Delaware. The petition lists assets between $100 million and $500 million, and liabilities ranging from $1 billion to $10 billion.

The operator officially stated plans to restructure its U.S. operations while exploring business sustainability or pursuing the sale of some or all assets. Earlier, Bloomberg reported last month that Forever 21 was considering various options to revive the business, including the possibility of filing for bankruptcy.

This is Forever 21's second bankruptcy filing. During its first bankruptcy six years ago in 2019, the company faced severe financial difficulties and conflicts among creditors. Hundreds of stores were closed at that time, and the private equity firm Spark Group acquired Forever 21 in an attempt to revive it, but ultimately the company faced tragedy once again.

According to current website information, Forever 21 operates approximately 540 stores worldwide. However, stores outside the U.S. are operated under separate licensing agreements and are reportedly not included in this bankruptcy filing.

Forever 21 has recently struggled due to inflation causing consumers to reduce spending on clothing. Additionally, decreased mall visits and increased online shopping have led to a sharp decline in sales.

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