Forever 21 isn’t so forever. Or is it?

Bankruptcy doesn’t necessarily mean it’s gone for good, but we will get more into that later. For now let’s take a trip down memory lane and see how we got here in the first place.

At its essence, Forever 21 is a contradiction. “Forever” denotes something infinite. “21” represents the finite. So which is it? Try solving the equation x= x+21 where “x” is infinity and report back. You might enjoy it.

If we grant the retailer artistic license and ignore its algebraic fallaciousness, we can assume (given that this is a fashion-related brand) that the title implies permanently being a certain age. We know this cannot be true in a literal sense unless we accept a radically different concept of time. Just ask Ponce de Leon.

Is there a way to stay “Forever 21” at least from a fashion sense?

It is often said that beauty is in the eye of the beholder. But is age in the eye of the beholder as well? Can we (via fashion), dress or apply makeup in such a way as to convince those who behold us that we are a certain age, regardless of our actual, chronological age?

So far that does not seem to be the case. Even with injections and other surgical interventions,  no one (as yet) has been able to achieve this – no matter how hard celebrities and others have tried.

Given that Forever 21 likely exists in the conceptual realm of what is, rather than what could be, there exists no current technology that allows us to perpetually appear 21 in the present age in which we live.

In a broad, metaphorical sense, it’s possible to accept that Forever 21 represents the idea that the right fashion choices can somehow give one the feeling that they are “young again.” Maybe the right hoodie or blouse can take you on a psychological trip all the way back to your senior year of college, no matter how many years away from it you may be. If Forever 21 is capable of doing just that, how on earth is it that they recently filed for bankruptcy?

Forever 21 was originally created in Los Angeles by South Korean immigrants and derived its business model from stores that were popular in South Korea in the 1980s. Apparently, the American market must have been clamoring for something they didn’t know they needed, because this concept took off like a rocket. The stores multiplied quickly and became a well-known brand by the 1990s.

Their approach wasn’t necessarily to make one feel young. Rather, it was geared towards a younger demographic. The space they occupied is something called “fast fashion.” Wikipedia can explain it better than I can.

“Fast fashion is the business model of replicating recent catwalk trends and high-fashion designs, mass-producing them at a low cost, and bringing them to retail quickly while demand is at its highest. The term fast fashion is also used generically to describe the products of this business model, particularly clothing and footwear.”

It makes sense that there would be a demand for fast fashion, especially among a younger demographic. They typically do not have the disposable income of other generations while simultaneously having a strong interest in current trends. It was in this niche that Forever 21 thrived.

As the fast fashion concept caught on, Forever 21 moved from being practically the only game in town to a business in a space with much competition. This made its growth (and even its survival) something that was not guaranteed in spite of its tremendous success.

There was also a subtly named phenomenon called the “retail apocalypse.” This began with the increasing popularity of internet shopping. By 2010 many chain stores began to close underperforming locations. The lack of performance was based on a consumer shift towards buying online instead of at the store. As this behavior accelerated, so did the closing of brick-and-mortar stores. As the snowball continued, it drove some chain retailers into bankruptcy. Some survived bankruptcy – others did not.

Brick-and-mortar retailers continue to struggle up to this present day. Forever 21 is no exception. So much so, in fact, that they have recently filed for bankruptcy… again.

Wait a minute! Again you say?!

That’s correct. Forever 21 filed for bankruptcy in 2019 – many years before its current bankruptcy. Juxtaposing the two will teach us a little about the Chapter 11 bankruptcy process.

Back in 2019, Forever 21 was not performing as well as expected, and it had many creditors it couldn’t afford to pay. It filed bankruptcy not necessarily to close,  but to take advantage of the Chapter 11 bankruptcy process and what it can do for a struggling business.

Chapter 11 is often viewed as a restructuring or reorganization of a business. The aim isn’t necessarily to close for good. Attorneys for the business and for its creditors, work to do what’s best for their clients. Ultimately the court decides the outcome for all parties involved. Often this means the closing of underperforming stores. Usually creditors will have to accept some kind of monetary loss and settle for less than what they are owed. This is usually better than if the business closes all together, because then they will receive nothing. Typically the overall business is sold to a third-party buyer as one of the final steps of the process.

If the business has enough worth, it will survive the chapter 11 process – usually as a leaner version of its former self. Often chapter 11 is “just what the doctor ordered.” It can breathe new life into an old, underperforming company. The fact that Forever 21 survived its first bankruptcy is a testimony of what the chapter 11 bankruptcy process can do for a struggling business.

Apparently the 2019 filling was not the silver bullet that it has been for others. If it was, we wouldn’t be here now – talking about a second bankruptcy. Unfortunately this new bankruptcy represents the other direction in which a chapter 11 can go. It was recently reported that the plan is to close all of its US locations. When a business goes into bankruptcy looking to close each and every store, it indicates a company that must be in a highly weakened state. No orders from the doctor can save it from its current infirmity.

If it wasn’t clear before – it most assuredly is now – that Forever 21 isn’t forever anymore.