Fashion retailer Forever 21 has formally announced that it will be filing for Chapter 11 bankruptcy protection in the United States.
The move was first rumoured following a lengthy report published by Bloomberg some months ago, but the retail giant officially confirmed that it will be closing between 450 and 500 of its 800 stores worldwide, with plans to exit most locations in Asia and Europe this weekend.
However, fans of the franchise shouldn't fret – as this doesn't necessarily mean the end.
Chapter 11 protection postpones a US company's obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.
This filing for bankruptcy doesn't necessarily mean that the brand would be gone forevermore, but it would help the company shed unprofitable stores and recapitalize the business.
In essence, the store wouldn't disappear everywhere, but a great majority of its physical footprint would be gone.
The company had previously tried to avoid filing for bankruptcy by seeking debt restructuring and new financing sources, but "negotiations with possible lenders have so far been stalled," per Bloomberg, so turning focus to bankruptcy is the natural next step.
Earlier this year, another retail giant – the world-famous Barneys – also filed for bankruptcy, seemingly demonstrating that the industry is in quite a state of flux.
Looks like the Netflix generation is actually listening to what's going on around them as – according to Fast Company – the resale apparel market is booming.
The 2019 thredUp Resale Report analysed the drivers pushing this revitalised sector, showing that 56 million women bought secondhand products in 2018, an increase of 12 million new secondhand shoppers from the year prior.
ThredUp reports that increased growth can be credited both to millennials and Generation Z, who adopt secondhand items 2.5 times faster than the average consumer.
Main image by @forever21
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