(NewsNation) — Forever 21 announced Monday the company is filing for bankruptcy and will begin to close its U.S. stores.
Brad Sell, chief financial officer of F21 OpCo, which operates Forever 21 stores, said in a statement the company evaluated all options but was “unable to find a sustainable path forward.”
He cited “foreign fast fashion companies, which have been able to take advantage of the de minimis exemption,” as one reason. The de minimis exemption allows businesses to import goods without tariffs if they are under $800.
Rising costs, “economic challenges” impacting customers and the “evolving consumer” are also to blame for the company’s issues, Sell said.
“As we move through the process, we will work diligently to minimize the impact on our employees, customers, vendors and other stakeholders,” Sell said.
Does Canada really have tariffs above 200% on US dairy products?
This is the second time Forever 21 has filed for bankruptcy. Before that, it operated at least 800 locations worldwide and saw $4 billion in annual sales, according to NewsNation local affiliate KTLA.
That number fell to 500 locations in 2019 after the company’s first bankruptcy filing. There are currently 354 locations in the United States that will shutter if Forever 21 doesn’t find a buyer.
According to court documents obtained by KTLA, Forever 21 is about $1.6 billion in debt. As of March 16, its assets are valued at an estimated $100 to $500 million.
Going-out-of-business sales started for 236 stores in mid-February, and these locations will close the week of March 30. The remaining stores are set to close before May 1, KTLA reported.
International locations will reportedly not be affected.
Forever 21 was founded in 1984 by Korean immigrants in California, NBC News reported.
NewsNation local affiliate KTLA contributed to this report.
