Forever 21 shuts its last Hong Kong store as 'street rallies become the straw that broke the fashion retailer's back'

By Pearl Liu pearl.liu@scmp.com / https://www.scmp.com/business/article/3030201/embattled-fashion-retailer-forever-21-closes-last-store-hong-kong-protests?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 26, 2019 10:38 AM SGT
Forever 21, the struggling Californian fast-fashion retailer, has shut its last shop in Hong Kong, officially pulling out of the city as three months of civil unrest took a toll on high-street retailers.
Protests 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 the bustling Mong Kok district. The company had reportedly filed for bankruptcy in August.
"Forever 21 has been under pressure in recent years facing fierce competition from online, while the current dire situation in the city's retail sector has speeded up its closure," said Helen Mak, senior director and head of retail services at Knight Frank.
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.
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 to Bloomberg's report on September 12, citing sources with knowledge of the preparations.
The plan envisions a Chapter 11 filing, which would allow the company to keep operating...