Danbury Fair Store to Close as Forever 21 Files For Bankruptcy
In a move to protect the store from creditors, the Los Angeles based company announced on Sunday that they are filling voluntary Chapter 11 bankruptcy protection.
In a letter to customers, published on its website, the company confirmed that it is not going out of business, so in no way does this mean the end of the once highly-popular chain, but the company did announce they will be closing some 178 U.S. locations including three Connecticut stores in the Danbury Fair Mall, The Stamford Town Center Mall, and a store located just outside of Hartford.
According to newsweek.com, the chain, which was once "the" place to shop for teens and millennials, made the move in an effort to secure the future of the company by focusing efforts on the more profitable core parts of its operations.
Since its opening back in 1984, Forever 21 became a destination for fashion at bargain basement prices. During the last ten years, while other stores were trying to cut back on their Mall presence, the chain had aggressively expanded their store count. However, in recent years, sales have slumped as mall traffic declined and young shoppers have gravitated toward online retailers.
Forever 21 said that it was able to obtain $350 million in new capital from lenders after filing for bankruptcy, which all falls into their efforts to remain in business while they are restructuring their operation.
Linda Chang who is the Executive Vice President of Forever 21, released this statement to the media explaining how this will actually help the chain:
This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and re-position Forever 21. With support from our key landlord and vendor constituents, we are confident we will emerge as a stronger, more competitive enterprise that is better positioned to prosper for years to come, and we remain committed to delivering the fast fashion trends that our customers have come to expect from Forever 21.