Forever 21 to Lay Off Hundreds, Close Headquarters and More Stores
As news of Forever 21 store closings trickle in across the country, the apparel retailer is set to lay off over 350 employees from its Los Angeles corporate office, which it also plans to close, reports USA TODAY. Layoffs are expected to begin on April 21, according to a Feb. 14-dated WARN notice, which is submitted when employers conduct mass layoffs. Included in the layoffs are a variety of managers, designers, supply chain directors and the company's chief financial and chief merchandising officers, the notice states. Individuals who remain employed by the company will transition to remote work after the corporate headquarters closes.
The closure of Forever 21’s operating headquarters comes on the heels of downsizing at Catalyst Brands, the fast-fashion retailer's operating company, which confirmed last month that about 250 employees were let go. Forever 21 has not specified how many stores it plans to shutter, but closures have already been reported in multiple states since last month.
Total Retail's Take: The layoffs and shuttering of the company's headquarters comes as Forever 21 faces financial woes while it struggles to compete with Chinese online discount retailers Shein and Temu, among other competitors. Forever 21 escaped Chapter 11 five years ago when mall owners Simon Property Group and Brookfield Corporation joined Authentic Brands Group, a global brand development company, to purchase the fast-fashion retailer out of bankruptcy and save it from liquidation. Jamie Salter, Authentic Brands chief executive, said during a conference in 2023 that acquiring Forever 21 was "probably the biggest mistake I made." CNBC reported last month that Forever 21 was in talks with liquidators and considering a second bankruptcy filing.
Sarah Foss, who is head of legal at Debtwire and an expert bankruptcy lawyer, told USA TODAY that "Chapter 11 liquidation appears to be the most likely scenario for the retail chain as a going concern buyer for its U.S. assets and leases has not yet emerged." However, shutting down the company's retail stores might "not mean the end of Forever 21" as Authentic Brands Group owns the brand and its intellectual property, which may not be part of a potential bankruptcy liquidation.
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
