The fast fashion brand in the emirates is franchised by Sharaf Group, which also operates electronics giant Sharaf DG
Fast fashion chain Forever 21 may have filed for bankruptcy in the US, but its shops in the UAE will continue to operate as usual, according to a spokesperson for the brand.
Alecia Pulman, ICR communications agency, told Arabian Business: “Our partner market in the UAE is not impacted by the US filing and will continue to be business as usual.”
Forever 21, which sells affordable clothes like rivals H&M and Zara, filed for Chapter 11 bankruptcy protection in the US, postponing its obligations to creditors in a bid to restructure its debts or sell parts of its business.
The brand will exit most international locations in Asia and Europe, closing nearly 350 stores worldwide, including 178 in the US alone. However, it will continue to operate shops in Mexico and Latin America. The closure of stores will almost cut its current number of total outlets in half from 800 to 450.
Forever 21 in the UAE is franchised by Sharaf Group, which also operates electronics giant Sharaf DG as well as Cotton On and Adventure HQ among other brands.
Sharaf Group did not respond to requests for comment by Arabian Business. However, when contacted, Forever 21 stores across malls in the UAE said they are still open and have no plans to close down.
While the brand’s mega-store in the Dubai Mall is closed, it is believed to be under renovation and scheduled to reopen.
The brand has obtained $275 million in financing from existing lenders JPMorgan Chase Bank and $75m in capital from TPG Sixth Street Partners to facilitate its restructuring which will “revitalize our brand and fuel our growth,” according to executive vice president Linda Chang.
She called the restructuring an “important and necessary step to secure the future” of Forever 21 and reposition the brand.
“With support from our key landlord and vendor constituents, we are confident we will emerge as a stronger, more competitive enterprise that is better positioned to prosper for years to come, and we remain committed to delivering the fast fashion trends that our customers have come to expect from Forever 21,” Chang said.
The retailer, which was founded in 1984 by South Korean immigrants, was known to have perfected the fast fashion model whereby it offered consumers a new collection of affordable clothing and accessories on a daily basis.
It is unclear whether its struggles are a direct result of a rise in e-commerce competition or a change in consumer trends.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.