Forever 21 to close Canadian locations

All 44 stores will shut down as part of the fast fashion banner's bankruptcy filing, moving its focus to the U.S. and Latin America.
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Forever 21 is shutting down most of its international stores, including all of its locations in Canada.

Coinciding with its bankruptcy filing in the U.S., Forever 21′s Canadian subsidiary has filed for creditor protection in Ontario, triggering a “winding down” of its operations in Canada. There are currently 44 Forever 21 stores in Alberta, British Columbia, Manitoba, Ontario, Quebec and Nova Scotia, which will remain open during the liquidation process.

As part of Forever 21′s bankruptcy filing late Sunday, the retailer is aiming to wind down its international operations to “focus on a profitable core part of its operations,” according to a press release, and help keep “the majority” of its locations open in the U.S. and Latin America.

In a separate release, Bradley Sell, chief financial officer of Forever 21 Canada, cited “years of poor performance and challenges set forth by the headwinds facing the retail industry today” for closing the banner’s Canadian stores. The privately held company does not regularly release financial results, but The New York Times reports that revenue at Forever 21 was $3.3 billion last year, down from $4.4 billion in 2016, with 16% of sales coming from ecommerce. Landlords at shopping malls that spoke to Retail Insider said many Canadian locations were earning less than $3 million annually.

Forever 21 first came to the Canadian market in 2002 and had been one of the focal points of the fast fashion industry, which – like many other retail categories – has been attempting to adapt to consumer demand for online shopping. Some fast fashion banners have succeeded, while others have not.

Global sales at H&M – which launched ecommerce in Canada in 2016 – grew 11% year-over-year for the first half of 2019. Global sales at Zara were up €572 million, or 3.2%, in the 2018 fiscal year, with a 27% growth in online sales. Net sales at Old Navy’s Canadian locations grew $37 million, or 6.7%, in the 2018 fiscal year, while sister banner The Gap is closing 230 locations across Canada and the U.S. this year. Japan’s Uniqlo has also opened a dozen locations since first coming to Canada in 2016, unveiling a store in the West Edmonton Mall last week, which is its first outside of Ontario or British Columbia.

Outside of the fast fashion category, PaylessTown Shoes and Home Outfitters have all shuttered their Canadian operations in 2019.

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