Fast-fashion giant Forever 21 has filed for Chapter 11 bankruptcy for the second time in six years, Reuters reports.
It cited declining mall traffic and intensifying competition from online retailers as key reasons for its financial struggles. The U.S. operating company made the filing on Sunday in the District of Delaware, the report added.
In a statement, the company announced that it will begin liquidation sales at its stores while simultaneously exploring a count-supervised sale of its assets.
If a suitable buyer emerges, Forever 21 may shift away from a complete shutdown and instead pursue a going-concern transaction, allowing it to continue operations in some form.
According to the bankruptcy court filing, Forever 21’s estimated assets range between $100 million and $500 million, while its liabilities stand significantly higher, between $1 billion and $5 billion.
The company also reported having between 10,001 and 25,000 creditors, underscoring the extent of its financial obligations.
Forever 21 first filed for bankruptcy in 2019, resulting in store closures and a restructuring effort. However, as shopping habits have shifted further towards e-commerce and direct-to-consumer brands, the retailers has struggles to regain its footing.