Published 10:42 AM EDT Sep 13, 2019
Forever 21 reportedly could close more than 100 stores in bankruptcy as the fashion retailer grapples with expensive leases and declining mall traffic.
The company is planning to shut down “at least” 100 locations as part of its restructuring plan, Bloomberg reported Friday.
The retailer did not immediately respond to a request seeking comment.
With more than 800 stores, Forever 21 is one of the largest specialty apparel retailers in the country. The family-owned company’s stores average 38,000 square feet, making it smaller than the average department store but larger than many of its apparel competitors.
The retailer’s aggressive expansion in recent years is now causing problems. The company may file for bankruptcy protection in a bid to revamp its operations and reemerge as a stronger company.
Forever 21 on Wednesday denied that it planned to file for bankruptcy on Sunday after The Wall Street Journal reported that it would do so as early as Sunday. Bankruptcy typically enables retailers to close stores cheaply by escaping costly leases.
“Our stores are open, and it is our intention to continue to operate the vast majority of U.S. stores, as well as a smaller amount of international stores,” the company said in a statement at the time.
More store closings coming: An estimated 12,000 shops could close by the end of 2019
Bankruptcy next?: Forever 21 says it’s ‘not planning to file for bankruptcy Sunday’
Across the retail sector, more than 8,200 stores have already announced plans to shut down this year, according to Coresight Research. That’s up from nearly 5,900 in 2018.
Mall retailers that have announced plans to liquidate in 2019 have included Payless ShoeSource, Gymboree, Charlotte Russe and Charming Charlie.
Not everyone is contracting. Old Navy on Thursday announced plans to open 800 new stores after splitting from the Gap, its parent company.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.