In September 2019, Forever 21 recently decided to file for bankruptcy for Chapter 11. The leading fashion retailer of 1990s however said that they are not stepping out of the market. The step will actually help it to re-evaluate its business strategies for the future. For now, it will close its 350 stores worldwide including countries like Japan and Canada and 178 in the US.This will bring down its empire from 800 to 450 stores.
The fashion trendsetter, that competes against giants like Zara and H&M, plans to continue in Mexico and America.
Bankruptcy: A sign Of Losing Hold Over Its Customers
The bankruptcy has come as a shock for the company that ruled the global fashion market for two decades. Forever 21 transformed the fashion market through its retail stores in the 1990s and enjoyed huge and quick in the early 2000s by selling trendy designer clothes and accessories at very low prices.
Forever 21 was actually known for its $5 tops once. It successfully became the hot favorite and ‘one-stop fashion destination’ for young, American shoppers, especially women, who found the collection at Forever 21 stores very refreshing.
The company followed an aggressive approach and focussed on expanding its business. Within six years it spread its wings from 7 to 47 countries.
However it could not match up to the competition it got from its contemporaries and the complexities of expansion. The retail industry has changed a lot in the past few years, there has been a shift from frequenting malls to online shopping.
The company stated that they are not going out of the business and they have filed for bankruptcy as protection and they are actually trying to bring Forever 21 on a successful track in the future.