Founders of bankrupt Forever 21 sell assets and suffer billion dollar loss

The founders of retail empire Forever 21, Do Won Chang and Jin Sook Chang, have agreed to sell their remaining shares for a billion dollar loss.

At its peak, the fashion company and owner of beauty retail chain Riley Rose, earned US$4.4bn in revenue.

But the Korean-American duo will only take home $81m for their share after it filed for bankruptcy in September 2019.

According to a court filing, the deal was struck with Simon Property Group and Authentic Brands.

When Forever 21 filed for bankruptcy it said it would “exit most of its international locations in Asia and Europe”, but opted to continue operations in Mexico and Latin America.

The Changs established the brand in 1984, as Fashion 21, with one store in Highland Park Los Angeles, US.

Upon filing for bankruptcy the company had more than 500 stores in the US.

Forever 21’s woes began in 2016 amid the retail downturn as it struggled to compete with e-commerce players such as H&M, Primark, Boohoo and ASOS.

In 2018, the decision was made to scale back its expansion plans and the couple’s net worth was halved to $3.1bn.