Forever 21's US operator has filed for bankruptcy for the second time in six years, planning to wind down operations due to increasing competition from online fast-fashion retailers. Challenges like rising costs, diminished mall traffic, and foreign brands capitalizing on duty-free exemptions have severely impacted the company's pricing power. Founded in Los Angeles in 1984, Forever 21 saw significant popularity, but the decline in brick-and-mortar sales combined with swift retail industry changes has led to its current predicament. Liquidation sales are expected as part of the company's closing process.
"We've been unable to find a sustainable path forward, given competition from foreign fast-fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin."
"Brick-and-mortar retailers like Forever 21 operate in a highly competitive environment where the cost of doing business is expensive and rising with inflation rates."
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