Forever 21 Files for Bankruptcy Again
On March 17, 2025, Forever 21, a once-dominant name in fast fashion, filed for Chapter 11 bankruptcy protection in the U.S. District Court for the District of Delaware, marking its second bankruptcy in six years. The retailer, known for its trendy, affordable clothing aimed at young shoppers, announced plans to wind down its domestic operations, with liquidation sales set to begin across its more than 350 U.S. stores. The company cited fierce competition from foreign fast-fashion giants like Shein and Temu, declining mall traffic, rising operational costs, and shifting consumer preferences as key factors driving this decision.
Forever 21’s parent company, F21 OpCo, stated that despite exploring all possible options, it could not find a sustainable path forward. The retailer has struggled to adapt to the rise of e-commerce and the aggressive pricing strategies of online competitors, which have eroded its market share. This filing follows a previous bankruptcy in 2019, after which Authentic Brands Group, alongside mall operators Simon Property Group and Brookfield Corporation, acquired the chain to stave off liquidation. However, the economic fallout from the COVID-19 pandemic, coupled with inflation and new competitive pressures, proved too much to overcome.
Liquidation sales are expected to conclude by May 1, 2025, unless a buyer emerges to rescue the brand’s U.S. footprint. International stores, operated under separate licensing agreements, will remain unaffected. Forever 21’s closure marks another blow to the traditional retail landscape, highlighting the challenges brick-and-mortar stores face in an increasingly digital shopping world.