I guess Forever 21 isn’t actually forever. Amid the growing economic downturn of the US, the fashion brand is facing financial woes and has to close around 200 stores to stay afloat, sparking rumours of bankruptcy.
The company, which has been a staple of the US high street since the 80s, is set to change its financial model.
In an effort to lower overheads and pull back profit, the company is going to switch to a much more online-focused market.
Forever 21 simply isn’t seeing the income it needs to justify storefronts anymore. The overheads that are required to keep shops open aren’t reflected in sales. A source told People, “Forever 21’s U.S. business is said to be shifting toward a digital-first model, supported by a streamlined retail footprint focused on approximately 100 top-performing stores.”
Akin to successful outlets like Temu, they will primarily work as a delivery fashion company. However, there will still be a few Forever 21 stores remaining, which will be the focus of their savings.
Forever 21 Closures Trigger Mass Layoffs Warning
A Worker Adjustment and Retraining Notification has been issued in California and Pennsylvania. The expected closure of multiple Forever 21 stores is expected to cause mass unemployment. As well as the closed stores, there will be the jobs lost in their LA headquarters.
It is expected that there will be 200 stores closed. Hundreds of staff will be left without jobs. There are around 350 employees in their headquarters to add to that number.
The layoffs and store closures across the US are made in an effort to keep from Chapter 11 bankruptcy. These changes will be devastating to many. The job market is already struggling in the US. However, a Forever 21 spokesperson has addressed the decision. “This decision was not made lightly,” they told USA Today in February. “We remain committed to transparency and fair treatment of our employees during this period of transition.”
The transition to an online model is a last-ditch effort for Forever 21. Whether or not this will be enough to keep them from collapse only stands to be seen.
