Iconic Fast-Fashion Brand to Shut Down All U.S. Stores Amid Financial Struggles
Forever 21 has filed for bankruptcy for the second time and will close all U.S. stores as it liquidates its assets. The move follows years of declining sales, increased competition from online retailers like Shein and Temu, and rising operational costs.
The retailer, which was a staple in American malls, had already downsized after its 2019 bankruptcy, but it failed to regain financial stability. Forever 21’s latest bankruptcy filing in Delaware’s U.S. Bankruptcy Court signals the end of an era for mall-based fast fashion.
Why Is Forever 21 Closing Stores?
Forever 21’s financial decline has been driven by several factors:
- 📉 Rising Competition: Online retailers Shein and Temu have undercut Forever 21 on price by leveraging an import tax loophole, allowing them to sell products without duties or tariffs.
- 💰 Soaring Costs: The brand has struggled with rising manufacturing, labor, and retail space costs, making it harder to compete with online-only retailers.
- 🛍 Changing Consumer Behavior: Shopping habits have shifted toward e-commerce and sustainable fashion, moving away from the mall culture that once fueled Forever 21’s growth.
- 🚪 Mass Store Closures: Over 350 Forever 21 locations across the U.S. are liquidating inventory, with all stores expected to shut down unless a buyer steps in.
Forever 21’s History of Financial Troubles
This is not Forever 21’s first bankruptcy. The brand first filed for Chapter 11 in 2019 but managed to stay afloat after being acquired by Authentic Brands Group (ABG).
However, the company’s recovery was short-lived. ABG’s CEO later called the acquisition his “biggest mistake,” as the brand continued to struggle despite efforts to revamp its business model.
In 2023, Forever 21 attempted a partnership with Shein, hoping to tap into its massive online audience, but the collaboration failed to deliver significant profits.
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Which Forever 21 Stores Are Closing?
Forever 21 is closing all U.S. locations, including stores in major malls across the country.
What’s Next for Forever 21?
Forever 21’s parent company, Catalyst Brands, is currently seeking a buyer for the chain’s remaining assets. The company has spoken with over 200 potential bidders, but no deal has been made.
If no buyer emerges, Forever 21 will completely shut down its U.S. operations and liquidate its inventory. Meanwhile, its foreign stores are not included in this bankruptcy, meaning the brand could survive internationally under new ownership.
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A Sign of the Retail Apocalypse?
Forever 21’s bankruptcy is part of a larger wave of retail closures. The U.S. retail landscape is changing, with major brands like Macy’s, JCPenney, Party City, and Joann Fabrics also shutting down locations.
According to Coresight Research, over 15,000 stores are expected to close in 2025, nearly double the number from 2024.
Forever 21’s downfall serves as a warning to brick-and-mortar retailers struggling to adapt to the e-commerce revolution.
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Will Forever 21 Survive?
Unless a last-minute buyer steps in, Forever 21’s U.S. presence will soon be a thing of the past. While its international stores remain, the mall-era fashion giant appears to be another victim of changing shopping trends and digital competition.
For shoppers, this means major liquidation sales, but it also marks the end of an iconic brand that shaped millennial fashion for decades.
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