Fashion chain Forever 21 filed for bankruptcy on Sunday and said it plans to exit most of its international locations in Asia and Europe. It will continue operations in Mexico and Latin America.
The company, which has 815 stores in 57 countries, said the restructuring will allow it to focus on the profitable core part of its operations, Reuters reported.
The India operations of the company, however, will not be impacted. “Forever 21’s India business is run as a franchise operation by Aditya Birla Fashion and Retail Limited (ABFRL). The business operations of the brand in India will not be impacted in any way by its restructuring underway in the US,” Alecia Pulman, corporate spokesperson for Forever 21, told HuffPost India in response to a query.
In 2018, ABFRL had downsized the brand’s stores and cut costs because the sales from the fast fashion business declined, Livemint had reported. ABFRL had reported a loss of Rs 23 crore in the fast fashion business during the quarter ended December 2017, the report added. This segment includes Forever 21.
The fast fashion segment of the ABFRL also witnessed a 10% decline in revenue from Q1 FY19 to Q1 FY20, The Hindu Business Line said.
“For Forever 21, we need to get a few elements of the business right in terms of store sizes, products. We have recently started to look at local production wherever possible, to reduce the impact of the duty that we have to pay and look at margin improvements in that business. After that it’s very scalable, because the brand is very, very desirable,” Ashish Dikshit, Managing Director (ABFRL) told The Hindu Business Line.