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Forever 21 store in Times Square in New York City...

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Forever 21 Files For Chapter 11 Bankruptcy

After a lot of chatter surrounding the rumors that Forever 21 was losing some steam, the company has officially filed for bankruptcy.

The huge fast fashion chain announced this weekend that they are filing for chapter 11 bankruptcy, also noting that it will close up to 178 stores, according to reports from the New York Times.

In a “Letter To Our Customers” shared on the company’s website, Forever 21 assured shoppers that filing for bankruptcy does not mean going out of business. They went on to share that they have not yet decided which stores will close and that nothing about their day-to-day operations in-store will remain exactly the same.

“Today, Forever 21, Inc. voluntarily filed for bankruptcy protection under chapter 11 of the U.S. Bankruptcy Code. Essentially this allows Forever 21 to continue to operate its stores as usual, while the Company takes positive steps to reorganize the business so we can return to profitability and refocus on delivering incredible styles and fashion you love for many years to come. This does NOT mean that we are going out of business – on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future.

Most importantly, our stores are open and it will continue to feel like a normal day – you will not see any changes in our stores, gift cards will continue to be accepted, and our policies, including returns and exchanges, remain the same.”

As CNN Business notes, bankruptcy allows retailers to get out of outstanding leases, which reduces the cost of shutting down stores. They said that the company is currently worth $3.4 billion and employees 30,000 people. Forever 21 said that it plans to leave open enough stores so that no American markets are entirely left without access to the chain.

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