Bay Area stores among Forever 21 closures
California has most locations that are expected to close
Forever 21, which has filed for bankruptcy, may close 178 stores around the United States, including several in the Bay Area.
When it filed for Chapter 11 bankruptcy protection, the privately held Los Angeles-based retail giant said it planned to close international locations, mostly in Asia and Europe, and would not be exiting major markets in the United States as it tries to reorganize. But the affordable teen fashion retailer’s court filings this week included a list of U.S. stores that it expects to shutter, although talks with landlords continue.
The company seems to be optimistic about negotiating lower rents. It expects “a significant number of these stores will remain open and operate as usual,” a spokeswoman said Thursday.
The number of stores Forever 21 plans to close nationally represents about a third of its U. S. locations. The following Bay Area stores are on the list, which the spokeswoman pointed out could change: • Hillsdale Shopping Center, San Mateo • The Shops at Tanforan, San Bruno • Oakridge Mall, San Jose • 2 Stockton Street, San Francisco • Northgate Mall, San Rafael • Sun Valley, Concord • Solano on Gateway Blvd., Fairfield
Other Northern California locations on the list include stores at the Del Monte Shopping Center in Monterey, Northridge Mall in Salinas and the Galleria at Roseville. California has the highest number of stores on the list at 41.
The stores will continue to accept gift cards, returns and exchanges, according to court filings. If the company is unable to negotiate favorable terms with landlords, U. S. stores on the list could shut down by the end of the year.
Forever 21 was founded in 1984 by South Korean immigrants Do Won Chang and his wife, Jin Sook, who still own the company. The chain, which started with one small store in Los Angeles, rose alongside other teen retailers with massive footprints in shopping malls. It grew to 549 U.S. stores and has 251 stores in other countries. Like other retailers, it has struggled in the past few years amid the popularity of online shopping.
“Retail in the U. S. is overstored,” said Sucharita Kodali, e-business and retail analyst for Forrester Research. She also cited the following reasons for Forever 21’s struggles: “shoppers who aren’t as excited about apparel… and other categories like beauty and technology are growing.”
More than 8,000 individual stores nationwide have closed or are expected to close this year, with apparel stores leading the way, according to Co
resight Research. That follows more than 5,500 individual U. S. store closings last year.
“Last year, we saw a lot of big malls dealing with anchor tenants closing, like Sears,” Ranjini Venkatesan, senior analyst with Moody’s Investors Service, said Thursday. “This year, (departures) are primarily concentrated in the inline, or smaller, stores.”
The Forever 21 news “highlights the challenges faced by regional mall landlords that own assets with relatively low sales per square foot,” she said. She noted that more than a dozen stores on the closure list are being leased from such landlords, such as CBL & Associates and Washington Prime Group.
Another retailer that recently announced a bankruptcy filing is jewelry and accessories seller Charming Charlie. Big chains that recently announced they have closed or plan to close a significant number of stores include Walgreens, Sears, Party City and Pier 1 Imports. Earlier this year, Gap, Payless ShoeSource, Gymboree and Charlotte Russe also announced they were shutting down stores.