We shopped at Forever 21 the day after the fast-fashion retailer filed for bankruptcy and saw firsthand why it's in hot water
Bethany Biron/Business Insider
- Forever 21 filed for Chapter 11 bankruptcy protection on Sunday and announced it will shutter up to 350 stores globally, effectively ceasing operations in 40 countries, including most of its locations in Europe and Asia.
- In a letter to shoppers, Forever 21 was emphatic that it was not going out of business, but instead "taking positive steps to reorganize the business."
- We visited Forever 21 stores in New York City and London the day after the bankruptcy announcement and saw firsthand why the company is in hot water.
- Visit Business Insider's homepage for more stories.
Turns out Forever 21 might not be quite as everlasting as its name lets on.The fast-fashion retailer filed for Chapter 11 bankruptcy protection on Sunday night, writing in a letter to consumers that it is "taking positive steps to reorganize the business" in order to "return to profitability." Advertisement
Read more: Forever 21, once among America's fastest-growing fast-fashion retailers, files for bankruptcy
As part of the filing, the mall brand staple will shutter up to 350 stores globally, effectively ceasing operations in 40 countries, including most of its locations in Europe and Asia. In the US, Forever 21 will close as many as 178 stores, though it will continue to sell products on its website and select locations, as well as in Mexico and Latin America, a spokesperson told Business Insider."This was an important and necessary step to secure the future of our company, which will enable us to reorganize our business and reposition Forever 21," Linda Chang, executive vice president of Forever 21, said in a press statement.
The announcement comes after several months of speculation, following reports that Forever 21 hired a team of advisers to help secure private-equity support as executives continued to butt heads with cofounder Do Won Chang.We visited Forever 21 stores in New York City and London the day after the retailer filed for bankruptcy and saw firsthand how the company went from fast-fashion powerhouse to a disorganized mess of cheaply made apparel.
First, we visited the Forever 21 store located inside of New York City's Oculus, a major shopping and transportation hub in the Financial District.
The first thing we noticed were bright yellow signs announcing a sale for up to 90% off and select items for $1 and $5.Advertisement
We arrived shortly after the store opened at 9 a.m., and there were very few shoppers in sight.
Once inside, we immediately spotted messy, disorganized racks brimming with discount items.Advertisement
There were also boxes of product and racks of hangers scattered around the store.
Then we made our way to the sale section, which was promoting $5 racks of clothing.Advertisement
As we got closer, we saw the area was a complete mess. In addition to bare racks, nothing was in any distinguishable order.
Throughout the store, piles of products were strewn about everywhere.Advertisement
Many of the displays were in disarray, with unfolded clothing. Here, we saw an unmanned ladder.
There seemed to be no semblance of organization. This area included men's and women's T-shirts, plaid skirts, sports bras, and other various accessories with no through line.Advertisement
Near the register, we spotted this "price menu" that included extremely cheap items like home goods for $1 and outerwear for $9.
The register was filled with more super cheap, disorganized products, but no shoppers.Advertisement
Concurrently, we visited Forever 21's only London store in the city's busy shopping area, Oxford Street.
While Forever 21 has said it will be closing most of its European and Asian stores, it's not clear yet whether this store will be impacted.Advertisement
In its heyday, Forever 21 was known for its cheap, trendy clothing. Today, the collection seemed somewhat uninspiring.
Our impressions of the store layout were good, despite this being a criticism of analysts. It wasn't rammed full of inventory and the apparel was neatly laid out.Advertisement
But it was impossible to distinguish one section from another. The three floors of women's clothing seemed to merge into one another.
The clothing was certainly cheap. But, online players such as Fashion Nova, Missguided, and Boohoo are selling clothing at a similar price point while rolling out thousands of new items each day.Advertisement
Upstairs, it was sales mania.
The racks were immaculately organized, but it was concerning to see so much stock on sale. Many of the items seemed to be seasonless basics.Advertisement
As we headed toward the exit, we saw signs urging customers to connect with the brand online. A quick glimpse on Instagram revealed that Forever 21 has exactly the same amount of followers as Fashion Nova and more than double that of Boohoo. Considering its massive following, and that it is soon to be free of some expensive real estate, it's possible that the company has the chance to turn the business around and keep up with its online rivals.
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