Forever 21 is closing its headquarters, laying off employees ahead of rumored bankruptcy

Fashion retailer Forever 21 is preparing to close at least 200 stores and lay off more than 350 employees in its corporate office as it struggles for viability.

The chain has been stumbling since filing for bankruptcy in 2019 and has struggled to stay relevant among emerging brands and cheap online options including Shein and Fashion Nova. Originally geared toward teenage girls when the first store opened its doors in 1984, Forever 21 has tried to broaden its appeal by expanding its offerings over the years to include apparel and accessories for men and children.

According to Bloomberg News, the U.S.-based operator of Forever 21 is widely expected to file again for bankruptcy in order to seek a buyer for the retailer’s remaining stores. If no qualified buyer is found, the company probably would liquidate its 350 locations.

The company also plans to close its downtown Los Angeles corporate headquarters, according to a regulatory filing with the California Employment Development Department first reported on by the Los Angeles Daily News. A Worker Adjustment and Retraining Notification, which is required when an employer lays off a significant percentage of its staff, said layoffs related to the closure of the corporate office will begin April 21.

The layoffs will include managers, designers and supply chain directors as well as the company’s chief financial officer and chief merchandising officer, the Los Angeles Daily News reported. Employees who remain with the company will transition to remote work after the corporate headquarters shuts its doors.

Forever 21 once operated more than 500 stores in the U.S. and 800 worldwide. It has been a mainstay of the retail scene and a staple of the fast-fashion industry for decades, after beginning as a single brick-and-mortar shop in Highland Park. Husband-and-wife team Do Won Chang and Jin Sook Chang owned the business until its bankruptcy in 2019, when the intellectual property and trademark were sold to brand management firm Authentic Brands. Forever 21’s operating company in the U.S., F21 OpCo LLC, is owned by Catalyst Brands.

Authentic Brands would maintain ownership of the Forever 21 brand throughout the potential Chapter 11 bankruptcy of F21 OpCo. Authentic Brands plans to license the brand to other retailers and distributors regardless of the U.S. operator’s sale or liquidation, Bloomberg reported.

Initially known as Fashion 21, Forever 21 helped pioneer the concept of fast fashion, which refers to inexpensive clothing quickly produced by mass-market retailers in response to the latest trends. As fast fashion exploded in the 2010s, Forever 21 began facing heavier competition and took steps to downsize ahead of its first bankruptcy.

The chain currently operates 58 stores in California, including several in the Los Angeles area.

“Forever 21’s operating company, which is the brand licensee in the U.S., continues to explore strategic options while also looking at ways to reduce costs across our operations and optimize our store footprint,” a Forever 21 spokesperson told Bloomberg. “The efforts are ongoing and no final decisions regarding the outcome of the process have been made.”