Popular fashion retailer, Forever 21, announced on Wednesday that they are packing their bags and leaving the Japanese market as competition with the new online fashion stores are tight, local news outlet, Japan Today, reported.
Forever 21 is closing down all their 14 stores across Japan as well as their online operations in the country by the end of October. The company said that the decision to leave the Japenese market was motivated by a series of losses in recent years in the company due to problematic sales. Forever 21 opened its first outlet in Japan in the trend-setting Harajuku district in Tokyo in 2009, and currently operates stores in Yokohama, Osaka and other major cities across the country.
The announcement comes after news reports surfaced regarding the plan of the Korean apparel brand to file for a Chapter 11 bankruptcy. With more than 800 stores across the U.S., Europe, Asia, and Latin America, Forever 21 is exploring the option of filing for bankruptcy as the financial situation of the company remains unresolved. The company weighs in the option as efforts to restructure its debt run dry, a person familiar with the plan said.
For the recent years, the apparel line has been exploring different restructuring options to keep their business afloat, but a person familiar with the matter said that these options are stalled, forcing the company to consider filing for bankruptcy in order to pull the company back up.
One reason for the potential bankruptcy filing, said experts, is the fact that the real estate footprint of Forever 21 huge. Much like any other apparel retailers, the company is leasing in malls and shopping centers. The bankruptcy filing, they said, would release the company from the lease agreements they entered in the past.