Forever 21 will close its two remaining stores in Philadelphia and several others in the region amid a nationwide downsizing aimed at attracting a buyer.
The struggling fashion retailer's stores at the Fashion District mall in Center City and the Franklin Mall in Northeast Philly will shut down by early May, according to a notice of impending layoffs filed with the Pennsylvania Department of Labor and Industry. The two closures will leave 36 workers without jobs, the notice said.
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The Forever 21 stores at the Cherry Hill and Deptford malls in South Jersey are among 15 stores expected to close in New Jersey in the coming months.
Forever 21 is on track to close at least 200 stores nationwide, Bloomberg reported last week. The company also intends to shut down its Los Angeles headquarters in the spring, laying off more than 350 employees. All told, the company's downsizing will affect about 700 workers, Retail Dive reported.
Forever 21 spent decades as a global leader in fast-fashion under the helm of husband-and-wife founders Do Won and Jin Sook Chang, who created the brand in South Korea in 1984. Rising mall rents and competition from online retailers pushed Forever 21 to its first bankruptcy filing in 2019. The company emerged under a new ownership group led by Simon Property Group, Brookfield Properties and Authentic Brands Group.
At its peak, Forever 21 had about 800 stores worldwide, including about 500 in the United States. That total had dwindled to about 350 U.S. locations ahead of the latest store closures. Authentic Brands licenses Forever 21's trademark and intellectual property to Catalyst Brands, whose umbrella also includes J.C. Penney, Aéropostale and Eddie Bauer, among other clothing retailers.
In recent years, Forever 21 closed its Center City store on Chestnut Street and another location at the Plymouth Meeting Mall in Montgomery County. The brand still has stores at the King of Prussia, Montgomery and Willow Grove Park malls in Montgomery County and the Oxford Valley Mall in Bucks County. The company has not said whether these locations will close as it explores options for its remaining stores.
Catalyst is expected to begin the Chapter 11 bankruptcy process for Forever 21 as soon as next month, Bloomberg reported. Authentic bought Forever 21 out of bankruptcy for $81 million in 2020. Four years later, CEO Jamie Salter reflected that it was the "biggest mistake" he had made. Salter said he failed to anticipate the emergence of Chinese-owned online retailers Shein and Temu, which have become two of the world's largest e-commerce platforms. Forever 21 partnered with Shein last year in an effort to increase its online sales.
Forever 21 most recently was led by CEO Winnie Park, who left the company in December to head up Philadelphia-based discount chain Five Below.
Earlier this month, the Wall Street Journal reported that Forever 21 could face challenges finding another buyer and might have to liquidate in a second bankruptcy. Simon Property Group and Brookfield Properties, two of the nation's largest mall owners, each had real estate interests tied up in keeping Forever 21 afloat during its last bankruptcy.
Simon Property Group sold Franklin Mall, formerly Philadelphia Mills, to new owners last year after it was unable to repay a $259 million loan. The Fashion District mall also has struggled since it opened in late 2019. A portion of that mall was expected to be redeveloped as a new arena for the 76ers before the team opted to partner with Comcast Spectacor on a new arena in South Philly. The 76ers and Comcast Spectacor, which owns the Flyers, pledged to invest in revitalizing East Market Street, but have not shared details about those plans and how they might impact the mall.