Forever 21 Blames de Minimis in Bankruptcy Filing
Retail company Forever 21 blamed de minimis for "materially and negatively" impacting its business, in its Chapter 11 bankruptcy filing in a Delaware court. The filing said that "certain non-U.S. retailers that compete with [Forever 21], such as Temu and Shein," have been taking advantage of de minimis to import goods into the U.S. cheaply and thereby "pass significant savings onto consumers."
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Retailers that have to pay duties on their imports to "purchase product for their stores and warehouses" have been "undercut" by de minimis, the company said. Despite what the company referred to as "wide-spread calls" from companies and industry groups to end de minimis and "create a level playing ground," the U.S. government's "laws and policies have not solved the problem." Lawmakers have recently introduced legislation to end commercial de minimis (see 2503050033).
The company's warning confirmed what other traditional U.S. retailers already know: "The ability for non-U.S. retailers to sell their products at drastically lower prices to U.S. consumers has significantly impacted the Company’s ability to retain its traditional core customer base."