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Forever 21 Files for Second Bankruptcy, Begins U.S. Shutdown

The fast-fashion retailer cites competition from online rivals, rising costs, and changing consumer trends as it winds down U.S. operations while seeking a buyer for its assets.

Image
Shoppers walk into a Forever 21 store at Fashion Valley, an upscale shopping mall on December 13, 2024 in San Diego, California.
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)
SAN FRANCISCO, CALIFORNIA - FEBRUARY 20: A sign advertising a storewide sale is displayed in a window at a Forever 21 store that is preparing to close on February 20, 2025 in San Francisco, California.

Overview

  • Forever 21 filed for Chapter 11 bankruptcy on March 16, 2025, marking its second bankruptcy in six years.
  • The company will close all U.S. stores and conduct liquidation sales, while its international stores and intellectual property remain unaffected.
  • Forever 21's liabilities are estimated between $1 billion and $10 billion, with assets valued between $100 million and $500 million.
  • The retailer attributes its struggles to competition from online fast-fashion giants like Shein and Temu, which benefit from duty-free import exemptions.
  • Forever 21's intellectual property owner, Authentic Brands Group, plans to modernize the brand's distribution model and continue licensing it internationally.