Fashion retailer Forever 21 filed for Chapter 11 bankruptcy protection Sunday after being hobbled by expensive leases, declining mall traffic, digital competition and fashion choices that fell flat.
Forever 21 requested court protection from its creditors in a bid to stay in business.
The family-owned company, which has about 32,800 employees, said it would close “most” of its stores in Asia and Europe and up to 178 stores in the U.S.
The retailer said the exact number of closures would be contingent on negotiations with landlords, but “we … expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the U.S.”
The company, which did not release a list of store closures, is negotiating lease concessions in hopes of lowering its costs. Four landlords account for nearly half of the retailer’s leases, according to a court filing.
With about 785 stores worldwide, including 534 company-owned locations in the U.S., Forever 21 is one of the largest specialty apparel retailers. The company’s stores are typically smaller than the average department store but larger than many of its apparel competitors.