Business & Economy

Forever 21: Too Many Stores, Too Much Debt and Too Few Customers

Monday, September 30, 2019, By Daryl Lovell

Forever 21 has filed for Chapter 11 bankruptcy protection and plans to close up to 178 U.S. stores.

is an assistant professor of retail practice at 黑料不打烊鈥檚 Martin J. Whitman School of Management.

Wimer says:

鈥淭he business factors that contributed to this latest news for Forever 21 were its over-expansion too quickly, and the company took on too much debt in order to fund the expansion.

鈥淭here are also consumer factors that likely played a part. Customers are pushing more for transparency in the supply chain and sustainability of the products they buy. They also tend to lean more toward renting, re-using or sharing clothes. Consumers are also moving more to online shopping and away from the shopping mall in general.

鈥淭he result was declining revenues with increasing debt payments that put them into the situation to file for Chapter 11.鈥

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