Forever 21 has announced plans to lay off 358 employees and close its Los Angeles Fashion District headquarters, as the company prepares for a potential second bankruptcy filing. The layoffs, set to begin on April 21 and continue through May 5, will affect managers, designers, supply chain directors, and product development and store operations managers.
In a letter filed with California’s Employment Development Department, Chief Financial Officer Bradley Sell stated that the layoffs at the headquarters would be permanent.
The retailer plans to close at least 200 U.S. stores as it seeks a potential buyer and financial restructuring. If an investor isn’t found, Forever 21 may face liquidation, which would bring an end to the business.
Forever 21 first filed for Chapter 11 bankruptcy in September 2019, leading to a significant reduction in its store count. The company has struggled to adapt to the e-commerce market and faces stiff competition from other fashion retailers like H&M and Zara.
The company’s financial troubles have been exacerbated by decreased mall foot traffic and increased competition from online retailers. The closure of the Los Angeles headquarters and the planned store closures are part of Forever 21’s efforts to restructure and address its financial challenges. The company is currently exploring strategic options, including a potential sale, to navigate its ongoing financial difficulties.
This development adds to the growing list of retailers facing financial struggles and store closures in recent years, as the retail industry continues to adapt to changing consumer behaviors and the rise of online shopping.