Forever 21 Philippines unaffected by US parent’s 2nd bankruptcy filing

FOREVER 21’s stores in the Philippines will continue operations despite the Chapter 11 bankruptcy filing of its US retail operator, F21 OpCo LLC, marking its second bankruptcy since 2019.

F21 OpCo filed for Chapter 11 protection on March 17 with approximately $1.58 billion in funded debt, according to a Bloomberg report.

In a statement, the company said that “Forever 21’s locations outside of the United States are operated by other licensees and are not included in the Chapter 11 filings.”

Forever 21 has more than 540 locations globally and online, according to the company’s website.

The Forever 21 trademark and intellectual property are owned by Authentic Brands Group, which licenses the brand to the operating company undergoing the bankruptcy process.

A notice to US customers posted on Forever 21’s website from Brad Sell, chief financial officer of F21 OpCo, attributed the bankruptcy to inflation and increased competition. “Rising costs and competition from abroad have made our current business model unsustainable,” Mr. Sell said.

The filing only affects US operations, and international franchisees will continue business as usual.

Founded in 1984 by Korean-American entrepreneurs Do Won and Jin Sook Chang, Forever 21 built its reputation on affordable, trend-driven fashion.

The retailer first filed for bankruptcy in 2019, leading to the closure of several international stores, including locations in Tokyo and Portugal.

Subsequently, the brand was acquired by Simon Property Group, Brookfield Properties, and Authentic Brands Group, which later established SPARC, a joint venture managing Forever 21’s operations.

In the Philippines, Forever 21 operates under a joint venture with SM Retail Inc., which brought the brand into the country in 2010 with its first store at SM Megamall. Philippine stores were not affected by the 2019 bankruptcy and continue to operate in multiple SM malls, including SM Mall of Asia, SM North EDSA, SM Clark, SM Baguio, SM Cebu, and SM Lanang in Davao.

“Our stores in the Philippines remain open and continue to serve our customers. We are closely monitoring developments regarding Forever 21’s US operations and will provide updates as necessary,” Joan Grace T. del Rosario, head of operations for Forever 21 Philippines, said in a text message on March 18.

According to the US company’s statement, liquidation sales will be conducted while a court-supervised sale and marketing process for assets is underway. As of writing, the US website advertises discounts of up to 80%. The company will honor gift cards and store credits until April 15, but has ceased issuing new gift cards or store credit.

Forever 21’s international e-commerce and non-US stores remain unaffected and will continue operations as usual, the company said. — Joseph L. Garcia