*

US operating company files for Chapter 11 bankruptcy

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Forever 21 will conduct liquidation sales for its stores

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US stores and website remain open, international stores

unaffected

(Changes dateline, adds background, comment from CFO in

paragraph 5)

By Nicholas P. Brown

March 17 (Reuters) - Fast-fashion retailer Forever 21's

U.S. operating company on Sunday filed for Chapter 11 bankruptcy

for the second time in six years, hamstrung by dwindling mall

traffic and mounting competition from online retailers.

The move means liquidation for the company, named F21 OpCo,

which was unable to find a buyer for its roughly 350 U.S.

stores. Forever 21's trademark and intellectual property - still

held by an entity called Authentic Brands Group - may live on in

a different form.

The rise of e-commerce players such as Amazon ( AMZN ) as

well as Shein and Temu, paired with the slow death of the

American mega mall, have hurt apparel retailers such as Forever

21 and Bonobos-parent Express, which filed for bankruptcy last

year.

Founded in Los Angeles in 1984 by South Korean immigrants,

Forever 21 at its height was popular among young shoppers on the

prowl for stylish but affordable clothing. By 2016 it was

operating around 800 stores globally, with 500 of those in the

United States.

"We have been unable to find a sustainable path forward,

given competition from foreign fast fashion companies, which

have been able to take advantage of the de minimis exemption to

undercut our brand on pricing and margin, as well as rising

costs, economic challenges impacting our core customers, and

evolving consumer trends," said Brad Sell, F21 OpCo's chief

financial officer.

De minimis refers to the U.S. waiver of standard customs

procedures and tariffs on imported items worth less than $800

that are shipped to individuals.

Forever 21 previously filed for Chapter 11 in 2019 and was

bought out of it by Sparc, a joint venture between label owner

Authentic Brands Group and mall operators Simon Property ( SPG )

and Brookfield Asset Management ( BAM ).

Now, Forever 21 plans liquidation sales at its stores while

it goes through a court-supervised sale and marketing process

for some or all of its assets.

Its stores and website in the United States will remain open

and continue serving customers, and that its international

stores remain unaffected.

The company listed its estimated assets in the range of $100

million to $500 million, according to a filing with bankruptcy

court in the District of Delaware, and liabilities in the range

of $1 billion to $10 billion. The filing showed creditors in the

range of 10,001 to 25,000.

In the event of a successful sale, Forever 21 may pivot away

from a full wind down of operations to facilitate a

going-concern transaction.

Forever 21 is currently owned by Catalyst Brands, an entity

formed on January 8 through the merger of Forever 21's previous

owner, Sparc Group, and JC Penney, a department store chain

owned since 2020 by mall operators and Simon Property Group ( SPG ).

When Catalyst Brands was formed, it said in a statement that

it was "exploring strategic options" for Forever 21.

Authentic Brands will continue to own Forever 21's trademark

and intellectual property, which could live on in some form.

Authentic Brands CEO Jamie Salter last year called acquiring

Forever 21 "the biggest mistake I made."

(Reporting by Nicholas P. Brown, Dietrich Knauth and Rishabh

Jaiswal, additional reporting by Juveria Tabassum; Editing by

Rosalba O'Brien, Rashmi Aich and Mrigank Dhaniwala)