Forever 21, Diesel, Gymboree: Iconic Fashion Labels That Filed For Bankruptcy
Bad Business Days
It has been reported that the bankruptcy is a result of the company’s rapid expansion while consumer tastes and shopping channels changed significantly in recent years. Linda Chang, VP, in an interview with The New York Times, said, “What we’re hoping to do with this process is just to simplify things, so we can get back to doing what we do best.” The company will reportedly soon cease operations in 40 countries and shut down 17 8 stores in America and 350 stores internationally.
Trivia: The company pioneered the ‘fast-fashion’ trend.
The American unit of denim and accessory brand Diesel filed for bankruptcy in March this year, blaming it on mounting losses, sales plunge, expensive leases and cyber fraud. In a statement, a company representative said that the restructuring will help Diesel USA operate as a “iconic and profitable brand”. But unlike other retailers that filed for bankruptcy, Diesel USA will not be shuttering its stores.
Trivia: The name Diesel was chosen by the founder Renzo Rosso because it was a term that was pronounced exactly the same way around the world.
Toys “R” Us
The iconic American toy store closed almost all 800 of its stores in 2018. The brand was deep in debt — estimated more than $5 billion — and had filed for bankruptcy the year before. The company’s financial woes were aggravated after private equity firms Kohlberg Kravis Roberts and Bain Capital, as well as the real estate firm Vornado Realty Trust, took over the company for close to $6 billion in 2005.
Trivia: The R in the company’s name was intentionally inverted to make it look like it was written by a child.
Payless first filed for bankruptcy protection in April 2017 during which it eliminated $435 million in debt and shut down 700 stores. Chief restructuring of f icer Stephen Marotta said in a statement, “The challenges facing retailers today are well documented, and unfortunately Payless emerged from its prior reorganisation ill-equipped to survive in today’s retail environment.” The 2019 bankruptcy filing reportedly estimates a debt of $470 million as the shoe retailer planned to shut down close to 2,400 stores in the US and Canada.
Trivia: Reportedly, close to 18,000 people worked for the company in 2018.
Gymboree, a children’s clothing retailer, filed for bankruptcy for the second time in less than two years in January. In a statement, CEO Shaz Kahng said, “The company has worked diligently in recent months to explore options for Gymboree Group and its brands, and we are saddened and highly disappointed that we must move ahead with a wind-down of the Gymboree and Crazy 8 businesses.” The company shut close to 800 stores.
Trivia: The company began as Kindergym when founder Joan Barnes launched a play program in San Rafael.