Forever 21 Files for Second Bankruptcy, Plans U.S. Store Closures

The fast-fashion retailer cites competition from Shein and Temu, shifting consumer habits, and economic pressures for its financial struggles.

Forever 21 has filed for Chapter 11 bankruptcy for the second time in six years and plans to shut down its U.S. operations, including liquidation sales at 350 stores.
The company attributes its financial troubles to rising competition from online retailers Shein and Temu, which benefit from a trade law loophole allowing duty-free imports under $800.
Forever 21’s international stores and online presence are unaffected by the bankruptcy, and its intellectual property remains owned by Authentic Brands Group.
Efforts to find a buyer for the U.S. business, including outreach to over 200 potential investors, have been unsuccessful, though the company is still open to offers.
The retailer's struggles are compounded by inflation, declining mall traffic, and shifting consumer preferences toward online shopping and lower-cost options.