Attention, Forever 21 customers! The fast fashion retailer will soon stop accepting gift cards. The company filed for bankruptcy this past March and is now preparing to say goodbye to all its stores. If you have a gift card, here’s the exact date after which it will no longer be accepted.
When will Forever 21 stop accepting gift cards?
The clothing store began its liquidation sales a few weeks ago, which are still ongoing as of Monday, April 14. However, the company has set a deadline for using gift cards. According to the retailer, customers can use their gift cards until Tuesday, April 15.
Can you still shop at Forever 21?
Yes. Some of the chain’s locations remain open, and customers can still shop both in physical stores and online. However, since the liquidation sale is in its final phase, the company is no longer accepting returns or exchanges. It is also no longer issuing new gift cards or store credit.
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Which stores have already closed?
So far, the company hasn’t released an official list of closed locations, but reports indicate that some stores have already shut down in the following states:
- Connecticut
- California
- Washington
- Pennsylvania
- Idaho
- North Dakota
When will all Forever 21 stores in the U.S. close?
According to the company, all retail spaces housing the more than 350 stores in the chain must be vacated by May 1.
Why did Forever 21 file for bankruptcy?
This is the second time the company has filed for bankruptcy; the first was in 2019. Authentic Brands, which owns the Forever 21 brand and its intellectual property, along with mall operators Simon Property Group and Brookfield Corporation, rescued the fast fashion retailer from that bankruptcy.
On Sunday, March 16, the company filed for bankruptcy again in the U.S. Bankruptcy Court for the District of Delaware, citing foreign fast fashion competition, rising costs, economic challenges, and shifting consumer trends as the main reasons.
According to the company, another factor contributing to declining sales is the highly competitive retail environment fueled by the de minimis exemption, which waives duties and tariffs on imported goods valued under $800.
Some non-U.S. online retailers competing with F21 OpCo—like Temu and Shein—have benefited from this exemption and have been able to pass significant savings on to consumers. As a result, retailers like F21 OpCo, who do have to pay tariffs and duties to stock their stores and warehouses in the U.S., have been at a disadvantage.
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History of Forever 21
In 1981, Jin Sook and Do Won “Don” Chang, two resourceful South Korean immigrants with no formal education, arrived in the United States chasing the American dream. To make ends meet, Jin Sook worked as a hairstylist, while Don took on various jobs, including janitor, barista, and gas station attendant. During that time, Don was inspired by the success of entrepreneurs in the fashion industry, motivating him to start his own business.
With just $11,000 in capital, they opened a 900-square-foot clothing store, originally named Fashion 21. Their strategy was to take advantage of wholesale liquidation deals, allowing them to offer trendy clothes at affordable prices. In their first year, Fashion 21 generated $700,000 in sales.
Although Fashion 21 initially targeted the Korean-American community in Los Angeles, the Changs quickly expanded, opening new stores every six months. As the brand’s success grew, they decided to rename it Forever 21, reflecting their vision of providing affordable fashion to those seeking a young, trendy, and fresh look.
Forever 21’s success was built on a simple yet powerful strategy: offering fashion at low prices, turning the brand into a fast fashion leader and a pioneer in the industry.
What is Chapter 11 of the U.S. Bankruptcy Code?
Filing for bankruptcy protection under Chapter 11 means that a company is on the brink of ceasing operations, but believes it can recover its success if given the opportunity to reorganize its assets, debts, and business operations.
By filing under Chapter 11, the company seeks protection from creditors while restructuring its business and debt. This type of protection is available to corporations, individual entrepreneurs, and partnerships. Under Chapter 11, the company’s management continues to oversee daily operations. However, major business decisions must be approved by the bankruptcy court.
