Forever 21, once a leader in youth fashion retail, is set to permanently close all its U.S. stores as it files for bankruptcy for a second time.
The operator of the brand’s U.S. unit said Sunday that foreign competition from fast-fashion rivals, rising costs, economic challenges and evolving consumer trends were to blame. For the time being, stores and the company’s
U.S. website will remain open as Forever 21 starts winding down operations and seeks a last-minute bidder for its assets.
The bankruptcy filing comes as challenges pile up for the retail industry.
Consumer brands have been warning investors about slower growth this year, and retail sales, rising just 0.2% last month, came in weaker than expected in federal figures released Monday.
Industrywide hiring has flatlined, and analysts expect brick-and-mortar operators to close more locations this year. Retail store closures hit their highest level since the pandemic in 2024, with recent shutdown announcements by fabrics seller Joann, discounter Big Lots, Party City and others adding to the tally.
Founded in 1984 by Korean immigrants in California, Forever 21 quickly became a mall staple for millennials seeking designer-inspired styles, alongside fellow low-cost retailer H&M and the pricier Abercrombie & Fitch.
Its sales peaked at more than $4 billion in 2015, with founders Jin Sook and Do Won “Don” Chang estimated to hold a combined net worth of $5.9 billion.
Yet as the 2010s wore on, the brand began to be eclipsed by online rivals, including ultra-cheap fast-fashion retailers like Shein and Temu that ship garments to U.S. shoppers from overseas, especially China. That embrace of e-commerce has proved challenging for Forever 21, which long relied on foot traffic at physical locations.
