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Forever 21 Files for Bankruptcy for the Second Time in Six Years

The fast-fashion retailer struggles with declining mall traffic, online competition, and shifting consumer trends as it begins winding down U.S. operations.

FILE PHOTO: Shoppers enter a Forever 21 fashion retail store at the King of Prussia mall in King of Prussia, Pennsylvania, U.S. September 30, 2019. REUTERS/Mark Makela/File Photo
A Forever 21 store in New York, US, on Friday, Feb. 7, 2025. Forever 21 is considering multiple options to turn around its business, which could include a second bankruptcy filing, according to people with knowledge of the matter.
FILE - Shoppers walk by a Forever 21 clothing store, Thursday, Oct. 24, 2019, in Tokyo, as the liquidation sale signs are posted on the storefront. (AP Photo/Kiichiro Sato, file)
A Forever 21 store in New York on Feb. 7, 2025.

Overview

  • Forever 21's U.S. operating company has filed for Chapter 11 bankruptcy, marking its second bankruptcy filing since 2019.
  • The company plans to conduct liquidation sales at its approximately 350 U.S. stores while seeking a buyer for some or all of its assets.
  • Forever 21 cites challenges including competition from online retailers like Shein, rising operational costs, and changing consumer preferences.
  • International stores and operations remain unaffected, and the brand's intellectual property is still owned by Authentic Brands Group.
  • Once a leader in fast fashion, Forever 21 has seen its store count drop significantly from its peak of 800 global locations in 2016.