Bethany Biron/Business Insider
Forever 21 could be in trouble.
- Forever 21 is reportedly considering teaming up with a private-equity firm to finance a large-scale restructuring plan.
- Though the retailer has long been a favorite among teen shoppers, it's lost its footing amid rising competition from other low-priced apparel stores and trendy e-commerce companies.
- We shopped at a Forever 21 store to see why the brand is in need of a major overhaul.
As Forever 21 teeters on the brink of bankruptcy, the retailer is eyeing a private-equity bailout to fund its much-needed turnaround.
The fast-fashion brand is reportedly in talks with Apollo Global Management to help raise debtor-in-possession funds if the time ultimately comes for Forever 21 to file for bankruptcy, according to Bloomberg. The move would allow founder Do Won Chang to maintain control, while setting in motion a large-scale restructuring plan intended to save the business.
Forever 21 has been particularly hard hit by rising competition from fellow low-priced apparel competitors as well as the rise of buzzy e-commerce companies like Fashion Nova and Boohoo. Though Forever 21 doesn't disclose financials, the Los Angeles-based chain shuttered several international stores in recent years, including most recently pulling out of China completely in April.
Despite serving an enthusiastic demographic of teenager shoppers since it first opened its doors in 1984, Forever 21 has shown continued signs of strife in recent years in the form of diminishing foot traffic, rampant discounts, and picked-over sales racks.
We visited a Forever 21 store in New York City and found just how much work the company needs to do in order to stay above water: