New York, New York - Fashion retailer Forever 21 said Monday it commenced voluntary bankruptcy proceedings in the US, beginning plans for an "orderly wind down" of US stores, while pursuing in parallel a possible sale.

The fast-fashion giant, in concert with its lenders, plans liquidation sales at US stores "while simultaneously conducting a court‑supervised sale and marketing process for some or all of its assets," according to a press release from F21 OpCo LLC, operator of the brand in the US.

The move marks the second Chapter 11 bankruptcy reorganization in six years by Forever 21, following a 2019 filing that significantly shrank the chain's store fleet.

The chain currently has 540 stores, according to its website.

The company's American stores "will remain open and continue serving customers" throughout the process, while locations outside the US, which are operated by other licensees, are not part of the bankruptcy plan, the company said.

Founded in Los Angeles in 1984 by South Korean husband-and-wife Do Won and Jin Sook Chang, Forever 21 became a ubiquitous presence in shopping malls across the US, offering teen customers imitations of high-fashion brands at rock bottom prices.

Neil Saunders, managing director of GlobalData, said the company had been buffeted in recent years with "dual headwinds" from a weak apparel market and stiff competition from cheap Chinese marketplaces.

"Forever 21 has not helped itself through these challenges: merchandising and the assortment have been lackluster, and the brand has lacked any clear point of view for a long time," Saunders said in a note.

"The net result is that more and more customers, especially those at the younger end of the market, have abandoned it."

Saunders pointed to the possibility that the brand could endure online through a licensing sale which would likely entail a price that "would need to reflect its now diminished status," he said.