Forever 21's Bankruptcy Scam: How They Got Free Clothes and Screwed Over Suppliers

Forever 21's Bankruptcy Scam: How They Got Free Clothes and Screwed Over Suppliers

So, here's how Forever 21 screwed over its suppliers just before declaring bankruptcy. They used the bankruptcy process as a scam to get free clothes that they could then sell for pure profit.

Here’s the play-by-play:

Forever 21, knowing full well they were about to go under, didn’t tell their suppliers. Instead, they ordered more clothes—and even asked for discounts on these bulk orders. Of course, the suppliers, hoping to keep the business relationship alive, agreed.

Then, bam. Right after receiving all these extra-large shipments of clothes, Forever 21 declares bankruptcy, leaving its suppliers in the dust without a cent.

Why’d they do this? Well, it’s simple. Forever 21 now has all this free inventory, which they can turn around and sell at a profit to customers and other retailers. Since they got it for free, anything they sell is straight-up profit.

This is a classic low-down move that many companies use when going bankrupt, but it’s still shady as heck.

Forever 21, for screwing over your suppliers when you knew you were going out of business, you just made the D3 List!