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Fast-fashion retailer Forever 21 filed for bankruptcy Sunday — for the second time in six years. The filing, published in a Delaware court, comes as the company grapples with rising inflation, fierce competition from Chinese e-commerce giants, trade uncertainty, and declining foot traffic in shopping malls, among other mounting headwinds.
F21 OpCo, LLC, the operator of Forever 21 stores and the licensee of the Forever 21 brand in the U.S., stated in the filing that it "will conduct liquidation sales at its stores while simultaneously conducting a court-supervised sale and marketing process for some or all of its assets."
Brad Sell, the company's chief financial officer, explained in a statement: "While we have evaluated all options to best position the Company for the future, we have 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, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends."