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Forever 21 to Close All U.S. Stores After Second Bankruptcy Filing

The fast-fashion retailer cites competition from international rivals, rising costs, and changing consumer habits as it winds down U.S. operations.

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 has filed for Chapter 11 bankruptcy for the second time in six years, planning to shut down all 354 U.S. stores by May 2025.
  • The retailer's U.S. website and stores remain operational temporarily as liquidation sales continue, while international locations remain unaffected.
  • Forever 21 attributes its financial struggles to competition from foreign fast-fashion companies like Shein and Temu, which benefit from the U.S. de minimis exemption, as well as rising costs and declining mall traffic.
  • Court filings estimate the company's liabilities between $1 billion and $10 billion, with assets valued between $100 million and $500 million.
  • The brand's intellectual property, owned by Authentic Brands Group, may continue under new operators, but the future of U.S. operations depends on finding a buyer for its assets.