Forever 21, once a dominant force in the fast-fashion industry, has filed for bankruptcy for the second time in six years and announced plans to close all its U.S. stores. The retailer’s U.S. operating company filed for Chapter 11 bankruptcy protection on Sunday in a Delaware court, citing declining mall traffic and intense competition from online retailers such as Amazon, Temu, and Shein.
The company plans to conduct liquidation sales at its U.S. stores while seeking potential buyers for some or all of its assets. Chief Financial Officer Brad Sell stated that despite efforts to find a sustainable path forward, Forever 21 could not overcome the challenges posed by competitive pricing from foreign fast-fashion companies.
Forever 21’s international operations will continue unaffected, as Authentic Brands Group (ABG), which owns the company’s international intellectual property, plans to modernize the brand’s distribution model and is open to new partnerships.
Founded in 1984, Forever 21 rapidly expanded to become a staple in American malls, appealing primarily to teenage shoppers. However, the retailer struggled to maintain its market position amid the rise of online discount retailers and changing consumer preferences. The company’s previous bankruptcy in 2019 led to its acquisition by a consortium including Simon Property Group, Brookfield Properties, and ABG.
In 2023, Forever 21 entered a partnership with Shein, but this collaboration yielded limited success. The current bankruptcy filing underscores the retailer’s ongoing challenges in adapting to a rapidly evolving retail landscape.
Sources:
- Associated Press: apnews.com
- Axios: axios.com
- Reuters: reuters.com
- The Wall Street Journal: wsj.com
