Forever 21 is waving good-bye to its downtown Los Angeles headquarters and laying off 358 workers ahead of reported plans for a second bankruptcy.
The fast-fashion firm informed the state of layoffs at its downtown Los Angeles headquarters in the California Market Center. The cuts go into effect by April 21.
Forever 21 wasn’t there long. It relocated its corporate headquarters from Lincoln Heights to downtown in 2022, grabbing 164,000 square feet in the building.
The office and showroom space is also home to the corporate offices for Adidas and Forever 21 sister company Lucky Brand. Among the companies with showrooms at the California Market Center are Free People, Paige, DL1961, Levi’s, Money Ruins Everything and Mavi.
Forever 21’s layoffs are the latest contraction for the retailer.
Bloomberg reported last week the company plans to close at least 200 stores as part of a pre-packaged bankruptcy.
The news outlet, citing anonymous sources, said the retailer hopes to sell its remaining fleet in a bankruptcy auction. The chain is currently about 350 stores. If no bidder steps up, they would liquidate.
A spokesperson for owner Catalyst Brands told Bloomberg the company “continues to explore strategic options.”
Ownership Backstory
Forever 21’s ownership is complicated.
Brand manager Authentic Brands Group owns the fast-fashion company’s intellectual property. A separate operating company, formerly known as Sparc Group, owned the business operations.
Sparc was comprised of Authentic, along with mall owners Simon Property Group and Brookfield Properties. The joint venture bought Forever 21’s operations, predominantly the stores, in its first bankruptcy.
The idea was supposed to be symbiotic. Forever 21 had breathing room being partly owned by some of its biggest landlords, while these mall owners had stability with a tenant that could absorb large amounts of space.
Sparc merged with JCPenney earlier this year to become Catalyst, with a brand portfolio that also includes Aeropostale, Brooks Brothers, Eddie Bauer, Lucky Brand Jeans and Nautica.
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