(Bloomberg) — Forever 21 Inc. filed for bankruptcy, joining the growing list of fashion retailers felled by heavy competition, high rents and the defection of shoppers to online outlets. Plans include cutting at least 178 domestic outlets from Forever 21’s approximately 800 stores, after a disastrous expansion outside the U.S. The Chapter 11 court filing on Sunday allows Forever 21 to keep operating while it works out a strategy to pay its creditors and turn the business around. All told, the retailer employs about 6,400 full-time and 26,400 part-time workers, court papers show. Forever 21 said it expects to exit most of its outlets in Asia and Europe, and it will shut all of its 44 Canadian stores that provide about 2,000 jobs, according to company statements. Forever 21 suffered from the same cutthroat pricing and online competition that has forced other U.S. retailers to close thousands of stores in the past two years. But its problems were deepened by inventory miscalculations–underspending one year, then overspending the next — and a botched international venture, according to court papers. The rapid global expansion left the company stuck with locations that were too expensive and too big, court papers show. Despite having… Read full this story
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