The American fashion retailer Forever 21 is about to file for bankruptcy.
According to Bloomberg, the company is dealing with significant debt and negotiations to obtain new financing have stalled.
They are now focusing on a Chapter 11, a form of bankruptcy that would allow the company to stay open while they recapitalise the business and close any stores that are underperforming.
It also means bad news for America’s struggling shopping malls; with Forever 21 closing so many stores, they will find it difficult to fill empty shopfronts, resulting in a significant loss of profit.
Founded by husband and wife team Do Won Chang and Jin Sook Chang in 1984, Forever 21 has over 700 stores in the US, Europe, Asia and Latin America, employing around 30,000 people.
They became known for their affordable, trend-led clothing, accessories and homeware.
However, they faced criticism in recent years as multiple designers have accused them of ripping off their clothing items.
According to Forbes, 50 copyright violations have been filed against Forever 21 and designer Diane von Furstenberg sued the company in 2007, accusing them of copying four of her dresses.
The brand recently collaborated with the early 2000s clothing brand Baby Phat for its relaunch and have previously partnered with Disney, Flamin’ Hot Cheetos and Pepsi.