A fast-fashion retailer’s bankruptcy is leaving vacancies in 32 malls across Texas.
Forever 21 filed for bankruptcy for the second time in six years, citing rising costs and increased competition from overseas brands. The company’s operator, F21 OpCo, voluntarily filed in the U.S. Bankruptcy Court for the District of Delaware on Sunday, the Austin American-Statesman reported.
As part of the restructuring, Forever 21 will begin winding down its U.S. operations while searching for a buyer for its remaining assets. The retailer’s stores and website will remain operational during the process. The company is seeking court approval to use cash collateral to continue paying employee wages and benefits.
Forever 21 has struggled to keep pace with low-cost competitors such as Shein and Temu, which have attracted consumers with trendy fashion at lower prices. While Forever 21 sells T-shirts for around $10, Temu offers similar items for as little as $5, for example. The growing dominance of these online retailers, coupled with economic pressures, has made it difficult for Forever 21 to maintain its market position.
The brand first filed for bankruptcy in 2019 before being acquired by a consortium that included Authentic Brands Group and Simon Property Group.
Buying Forever 21 “was probably the biggest mistake I made,” Authentic Brands CEO Jamie Salter said at a conference last year, Retail Dive reported.
But the brand is seeking buyers to salvage the business.
“Retail is changing, and like many brands, Forever 21 is adapting to create the right balance across stores, e-commerce and wholesale,” Jarrod Weber, global president of lifestyle at Authentic Brands, told Fox Business.
High occupancy, historic demand and stagnant development have defined the retail market across the Texas Triangle for the past couple of years. While big-box stores such as Conn’s, Big Lots and Party City are shutting down, their spaces are often backfilled by retailers including Burlington and Ollie’s Bargain Outlets, as well as various fitness concepts and specialty grocers, according to Weitzman.
Texas’ regional shopping malls are healthier after decades of decline and redevelopment. Occupancy was 93.4 percent among Dallas-Fort Worth malls at the end of last year, for example, up from 91.3 percent a year earlier, Weitzman said.
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