TORONTO — Fashion retailer Forever 21 is shutting down its 44 Canadian stores after filing for bankruptcy protection in the United States.
On Sunday, the company’s Canadian subsidiary was granted creditor protection in an Ontario court.
The struggling chain has stores in Alberta, British Columbia, Manitoba, Ontario, Quebec and Nova Scotia and employs about 2,000 people. A news release said those locations will stay open during the liquidation process.
“After considering numerous options, we have made the difficult decision to discontinue operations in Canada,” said Bradley Sell, chief financial officer of Forever 21 Canada in a statement. “We had hoped for a different outcome, but after years of poor performance and challenges set forth by the headwinds facing the retail industry today, our Canadian operations are simply no longer economically viable.”
Peak sales of US$4.4 billion
The privately held company based in Los Angeles filed for bankruptcy protection in the U.S. on Sunday to restructure its business. Started in 1984, Forever 21 was seeing US$4.4 billion in sales at its peak in 2015, according to Forbes.
The retailer said in a statement Sunday that it would close most of its international locations in Asia and Europe, and continue to operate in Mexico and Latin America.
Executive vice-president Linda Chang, whose parents Do Won and Jin Sook Chang founded the company after immigrating to the U.S. from South Korea, said in an interview with New York Times that their rapid and aggressive expansion, combined with the changing retail landscape, was to blame.
Forever 21 is the latest in a series of high-profile retailers to close their doors in Canada this year, including Payless ShoeSource, Town Shoes, and Home Outfitters. All had large footprints in major malls, which are attracting fewer shoppers, with many who buy online instead.
With a file from Josie Harvey/HuffPost