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Forever 21 To File For Bankruptcy

Fast-fashion staple store might be closing door Shopping mall staple Forever 21 is reportedly preparing for a potential bankruptcy filing, which could cut under-performing locations. Although the privately-owned business...

(Photo Credit: Mariana Bazo / Reuters file)

Fast-fashion staple store might be closing door

Shopping mall staple Forever 21 is reportedly preparing for a potential bankruptcy filing, which could cut under-performing locations. Although the privately-owned business did not release financials, one industry analyst told Forbes that they estimated Forever 21 sales dropped by 20 percent or 25 percent last year.

Founders Jin Sook and Do Won Chang started the company back in 1984 after immigrating to the United States from South Korea. According to Forbes, the husband and wife lost their billionaire status as with this recent turmoil, estimating a net worth of $1.6 billion, which is down from a previous estimate of $3 billion.

More than just filing for bankruptcy, pop star Ariana Grande is suing Forever 21, claiming that the fashion retailer sought to trick customers into thinking Grande endorsed its brand by posting photos of her on social media accounts. Grande said the model looked “strikingly similar” to her from her “7 Rings” music video.

“The resemblance is uncanny and Forever 21’s intent was clear: to suggest to the viewing public that Ms. Grande endorsed Forever 21, its products, and was affiliated with Forever 21,” the lawsuit said.

Last November, Forever 21 reached out to Grande for a potential endorsement deal that would be centered on social media, the lawsuit further said. Grande’s representatives considered the deal but ultimately declined because the fashion retailer wasn’t willing to pay Grande enough. The “Thank U, Next” singer is worth “well into the six figures,” according to the lawsuit.

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