WORLD BUSI­NESS

Fash­ion chain to close up to 178 stores in US

The Korea Times - - FRONT PAGE -

Low-price fash­ion chain For­ever 21, a one-time hot des­ti­na­tion for teen shop­pers that fell vic­tim to its own rapid ex­pan­sion and chang­ing con­sumer tastes, has filed for Chap­ter 11 bank­ruptcy pro­tec­tion.

NEW YORK (AP) — Low-price fash­ion chain For­ever 21, a one-time hot des­ti­na­tion for teen shop­pers that fell vic­tim to its own rapid ex­pan­sion and chang­ing con­sumer tastes, has filed for Chap­ter 11 bank­ruptcy pro­tec­tion.

The pri­vately held com­pany based in Los An­ge­les said Sun­day it will close up to 178 stores in the U.S. As of the bank­ruptcy fil­ing, the com­pany op­er­ated about 800 stores glob­ally, in­clud­ing more than 500 stores in the U.S.

The com­pany said it would fo­cus on max­i­miz­ing the value of its U.S. stores and shut­ter cer­tain in­ter­na­tional lo­ca­tions. For­ever 21 plans to close most of its lo­ca­tions in Asia and Europe but will con­tinue op­er­at­ing in Mex­ico and Latin Amer­ica.

“The de­ci­sions as to which do­mes­tic stores will be clos­ing are on­go­ing, pend­ing the out­come of con­tin­ued con­ver­sa­tions with land­lords,” it said in the state­ment. “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.”

For­ever 21 joins Bar­neys New York and Diesel USA in a grow­ing list of re­tail­ers seek­ing bank­ruptcy pro­tec­tion as they bat­tle on­line com­peti­tors. Oth­ers like Pay­less ShoeSource and Char­lotte Russe have shut down com­pletely. The num­bers bear out the cri­sis fac­ing tra­di­tional re­tail­ers. So far this year, pub­licly traded U.S. re­tail­ers have an­nounced they will close 8,558 stores and open 3,446, ac­cord­ing to the global re­search firm Core­sight Re­search. That com­pares with 5,844 clo­sures and 3,258 open­ings in all of 2018.

Core­sight es­ti­mates the store clo­sures could num­ber 12,000 by the end of 2019.

For­ever 21 was founded in 1984 and, along with other so-called fast fash­ion chains like H&M and Zara, rode a wave of pop­u­lar­ity among young cus­tomers that took off in the mid-1990s.

Their pop­u­lar­ity grew dur­ing the Great Re­ces­sion, when shop­pers sought fash­ion bar­gains.

But over the last year or so, fast fash­ion has fallen out of style. Young cus­tomers are los­ing in­ter­est in throw-away clothes and are more in­ter­ested in buy­ing eco-friendly prod­ucts. They’re also grav­i­tat­ing to­ward rental and on­line sec­ond-hand sites like Thredup, where they see clothes worn again in­stead of end­ing up in a land­fill.

These trends are hap­pen­ing while dis­coun­ters like Tar­get have spruced up their fash­ion as­sort­ments, steal­ing away cus­tomers.

For­ever 21 has also been more vul­ner­a­ble than some other chains be­cause of its large foot­prints in ma­jor malls, which are at­tract­ing fewer shop­pers.

AP-Yon­hap

Women se­lect cloth­ing at an Amer­i­can fast fash­ion re­tailer For­ever 21 which is of­fer­ing clear­ance dis­counts at a shop­ping mall in Bei­jing in this May 7 file photo.

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