Forever 21 should close all stores in Brazil by Sunday

When the fashion retail chain Forever 21 opened its first units in Brazil, there was a huge queue of consumers craving low-priced clothing at the entrance of the stores. Now, eight years later, the brand is leaving: the shelves are nearly empty, the product is gone, and a half-price sale continues to burn stock to 19 of the company’s 15 units in the country. must be permanently closed.

Consumers were surprised at Bourbon Shopping in São Paulo. “I didn’t know it was going to close. Then I went in, saw the liquidation and an employee told me (the closing). mello.

T-shirts were sold in the store for Rs 40. Dresses were rescheduled from R$59 to R$15. Even the tank tops were for R$5. “I think the shutdown is bad,” said risk analyst Victor Antonelli. “There are very few stores with such variety and low prices.”

slavery

In 2012, the U.S. Department of Labor said it found Forever 21 supplier workshops under slavery-like working conditions in Los Angeles, California, where the company is headquartered. But the network said these issues will be resolved in the same year. according to the magazine forbesThe company has also been sued more than 50 times for copyright infringement. When contacted with Forever 21, both in Brazil and the US, it did not respond to the report.

English teacher Bettina Oliveira, who bought a dress worth R$129 at a discount for R$75, said that the store does not have customers for such reasons. “I won’t miss it. On top of that, modeling is always done for very small and skinny people.”

Scenario

The majority of consumers today are more selective and do not spend much on so-called fast fashion. And those who love this style of fashion remember retail expert Sandro Magaldi opting for the internet at lower prices with platforms like Shopee and Shein. In addition, there is the opposite movement, slow fashion, in which consumers prefer to pay a higher price for better quality clothing.

Thus, the company has been in judicial restructuring in the US since September 2019. The alleged cause at the time was competition between high street stores and e-commerce. The retailer, which has 800 stores in the US, Asia, Europe and Latin America, has turned to Section 11 of the US Bankruptcy Act, which allows it to retain control and ownership of its assets while managing the restructuring.

Last week, Authentic Brands Group (ABG), a global brand development company, announced that it has acquired Forever 21. Another shareholder of the company is the Brookfield Property Partners fund.

Here, the broth began to flow last year when Forever 21 became the target of malls’ lawsuits for overdue rents. In early 2021, the fashion company closed all 11 stores in the shopping centers of the Multiplan network in early 2021, including those in Morumbi, Vila Olímpia and Anália Franco (São Paulo), Brasília, Ribeirão Preto (SP) and Canoas (LOL). ). When contacted, Multiplan declined to comment on the matter.

Months later, Rio de Janeiro Justice accepted a request from shopper RioSul (directed by Combrascan) and gave the brand 30 days to leave the venue. Evacuation has taken place. RioSul, called, said it did not disclose details of the trade negotiations.

There were at least two other lease default lawsuits filed by Shopping Tijuca and Plaza Shopping Niterói, both owned by BRMalls, which declined to comment on the matter. The Brazilian Association of Shopping Centers (Abrasce) said it has no knowledge of whether these cases have been resolved.

Discussion

Forever 21 store has been recognized as the “anchor” for developments exceeding 1,000 m² in the shopping centers where they operate. “It’s difficult to renegotiate with a company that you know is its parent company going through a judicial recovery,” says Nabil Sahyoun, president of the Brazilian Association of Shopkeepers (Alshop).

According to Sahyoun, Forever 21 currently has 15 stores in Brazil, and all of them should close by Sunday. Store employees at the Bourbon mall in São Paulo verify the information. The ten-person team will be laid off this month. “I’ve been here for seven years and I never thought it could happen. The liquidation is going well. The shelves and hangers will be sold to other companies. Now I don’t even know where to work,” said one employee.

The information is taken from the newspaper. State of Sao Paulo.