As expected, “fast fashion” clothing retail chain Forever 21 has filed for Chapter 11 bankruptcy protection, citing more than $1 billion in liabilities.In documents filed in U.S. Bankruptcy Court in Wilmington, Delaware, Forever 21 Inc. said it had liabilities between $1 billion and $10 billion owed to more than 100,000 creditors. It reported assets in the same $1 billion-to-$10 billion range.
Indications that the chain could file for bankruptcy protection began to emerge in late August, when it was speculated that Forever 21 could join such other recent high-profile retail bankruptcies as Payless, Toys R Us and Charlotte Russe.
There are 600 Forever 21 stores in the U.S. – including in Danbury, Stamford, and Trumbull in Connecticut, and in Poughkeepsie, Yorktown Heights and Yonkers in New York – with approximately another 200 outlets in Canada, Asia, Europe and Latin America.
Which and how many stores could close remains an open question. In a letter to its customers, Forever 21 said that “We have requested approval to close a number of stores across the U.S. The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords.
“We do however expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the U.S.,” it stated.
The letter also stressed that “This does NOT mean that we are going out of business.”