Retail Apocalypse: Forever 21 Bankruptcy

Retail Apocalypse: Forever 21 Bankruptcy

On September 29, 2019, Forever 21, Inc. sent out a letter to their customers stating that the leading fast-fashion retailer would be filing for Chapter 11 bankruptcy. Under Chapter 11 of the U.S. Bankruptcy Code, Forever 21 is able to protect their company and assets during a time of downsizing and reorganizing to put themselves back on a track of financial success. For Forever 21 fans, this means that your favorite fast-fashion retailer is not going out of business, especially in the U.S. mass market. Their online store will also stay up for business. 

Forever 21 will, however, be closing up to 178 stores in the United States and ceasing operations in 40 countries, including Japan and Canada, as of most recent updates. The store will be joining multiple other retailers, including Charlotte Russe, Payless, Diesel USA, and Gymboree, in what has been referred to as the “retail apocalypse.” 

But why? Why are retailers going out of business and filing for bankruptcy with such fervor in 2019? 

The answer seems to be fairly consistent with researchers, pointing to the rise of online stores and the changing values of consumers. Retailers that rely on their brick-and-mortar stores are finding it difficult to thrive and keep up with the quick turnover of inventory that e-commerce sites are capable of. But the biggest turning point for fast-fashion retailers is that consumers are looking for more sustainable and ethical fashion options, turning to consigned goods and brands that offer ethically sourced materials and fair wages for their workers. 

As thrift and consignment stores move to online platforms, such as thredUp, Poshmark, and your very own New 2 You LX, sustainable fashion options are becoming increasingly easier to find. Now, you can order sustainable goods with the same ease that fast-fashion retailers offer. Sustainable and ethical fashion is becoming just as affordable and convenient as fast-fashion and these bankruptcies are the proof.

Leave a comment