The struggling fast fashion retailer was already facing competition from online outlets, and the social unrest in the city sped up its closure
The Forever 21 shop in Mong Kok announced it was closing, eight years after the retailer first entered Hong Kong.Fast fashion store Forever 21 has closed its last location in Hong Kong. The brand was already struggling with money issues, and three months of protests have meant that sales in the city have sharply declined.
Demonstrations which have frequently turned violent in some of the city’s major shopping areas are likely to have been the final straw, forcing the clothing chain to close down its three-storey flagship store in Mong Kok. The company reportedly filed for bankruptcy in August.
“Forever 21 has been under pressure in recent years, facing fierce competition from online [retailers], while the current dire situation in the city’s retail sector has sped up its closure,” said Helen Mak, senior director and head of retail services at Knight Frank.
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The American fashion retailer first came to Hong Kong in 2011 with a 50,000-square foot (4,645 square metres) flagship store in Causeway Bay, and then expanded to Mong Kok five years later. Amid a cool down in the popularity of fast-fashion, Forever 21 closed the Causeway Bay store two years ago, and the space was taken up by New York-based lingerie giant Victoria’s Secret.
According to filings made with the Land Registry, the current term of the lease for the Mong Kok premises - at a monthly rate of HK$2.6 million (US$331,600) will end in May 2023. But Forever 21 has opted to surrender the 19,200 sq ft space early.
The landlord has put the space on the market with no specific asking price, “subject to offer”, according to sources familiar with the matter. They expected difficulties in leasing out the space in the short term, and predicted a rent cut.
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It has been reported that Forever 21 is preparing to file for bankruptcy. The American retailer is planning to close at least 100 stores as part of a restructuring that calls for the trendy retailer to file for bankruptcy as early as this month, according a Bloomberg report on September 12, citing sources with knowledge of the preparations.