Forever 21, the fashion retailer is closing all of its 44 stores in Canada after the company filed for bankruptcy protection in the United States. The company’s Canada based subsidiary was also granted creditor protection by an Ontario court.
The struggling retail chain which has stores in Nova Scotia, Alberta, Quebec, British Columbia, Ontario, and Manitoba has a workforce of approximately 2000 employees. According to a press release by the company all of these store locations will remain open throughout the process of liquidation.
Bradley Sell, the chief financial officer for Forever 21 in Canada made a statement about the developments: “After considering numerous options, we have made the difficult decision to discontinue operations in Canada. We had hoped for a different outcome, but after years of poor performance and challenges set forth by the headwinds facing the retail industry today, our Canadian operations are simply no longer economically viable.”
Company to Continue Operations in Latin America
Founded in 1984, Forever 21 used to have a peak sales figure of USD 4.4 billion in 2015. Forever 21 is a privately held enterprise, which is based in Los Angeles has filed for bankruptcy protection in the U.S., with the aim of restructuring the business.
According to a statement by the retailer, the company intends to close most of its operations around the world including international operations in Europe and Asia. However, the company intends to keep its Latin American and Mexican operations running for the near future.
Linda Chang, the executive vice president of the company has a long history with Forever 21. Her parents Jin Sook Chang and Do Won, South Korean immigrants to the U.S. were the founders of the company. Now, Linda Chang has put the blame of the company’s failure on rapid and aggressive expansion approach used by the company, which was hit by the changing landscape of the retail industry.
Forever 21 has become the latest in a long list of major retailers to close operations in Canada in 2019. Most of these retailers had a major presence in malls that are failing to attract shoppers, who are increasingly looking online to meet their shopping needs.