Forever 21, a once-popular fashion chain, is facing its second bankruptcy in just five years. The company is set to close 200 more stores across the U.S. due to mounting debt. Forever 21 could file for Chapter 11 protection as soon as next month, according to reports from Bloomberg News. If no buyer emerges, the remaining stores will shut down permanently. This marks another painful chapter in the brand’s troubled journey, following its first bankruptcy filing in 2019. Despite emerging from that financial crisis in 2020 with new ownership, Forever 21 seems to have lost its way.
2019 bankruptcy didn’t save Forever 21
In 2019, Forever 21 faced bankruptcy and closed hundreds of its stores. At that time, the company hoped it would bounce back under new ownership. It did manage a brief recovery but now finds itself back at the brink of disaster. Its comeback was short-lived, and now the brand is struggling more than ever. While Forever 21 once dominated malls across the U.S., it now faces an uncertain future. This second bankruptcy could mark the end for the once-iconic retailer.
Competition from Shein, Temu and more
Experts say the rise of online retailers like Shein and Temu is a major factor in Forever 21’s decline. “Shein and Temu have battered Forever 21,” explains retail expert Neil Saunders. These fast-fashion giants offer cheaper, trendy clothes that appeal to the same demographic Forever 21 once catered to. The competition doesn’t stop there. Brands like Zara and Uniqlo have also raised the bar for fast fashion. They’ve made it harder for Forever 21 to compete. The brand once dominated the teen market but now struggles to maintain relevance.
At its peak, Forever 21 had over 500 stores in the U.S. But today, the stores feel outdated. They are too large and filled with generic products that lack a unique identity. Shoppers are turning to cheaper online alternatives, making it difficult for Forever 21 to hold its ground. The brand’s struggle to adapt to new trends and evolving customer demands has made it hard to keep up.
The end of an era?
Forever 21 is now on the lookout for a buyer for its remaining U.S. stores. If it can’t find a buyer, the entire chain might be liquidated. This marks a tough moment for a once-thriving brand. However, the company’s future could still have some hope. The Forever 21 brand name and intellectual property are owned by Authentic Brands. This company licenses the name to Catalyst Brands in the U.S. Authentic Brands has a plan in place. It plans to continue licensing the Forever 21 brand, regardless of what happens to Catalyst Brands.
Forever 21’s failed comeback
Authentic Brands bought Forever 21 during its first bankruptcy. CEO Jamie Salter later admitted that the deal was a mistake. “It was probably the biggest mistake of my career,” he said. Salter had underestimated competitors like Shein and Temu. By the time he realized the impact these brands were having, it was too late. Forever 21’s struggle to compete against these fast-fashion giants has been the brand’s downfall.
The global picture
While U.S. stores are closing, Forever 21 still has around 120 locations around the world. However, its once-staggering global presence has shrunk. At its peak in 2015, Forever 21 was valued at $6 billion. The brand’s founders, Do Won Chang and Jin Sook Chang, made billions. But now, their fortune has diminished as the brand’s relevance fades. The brand may still survive globally, but its American operations seem to be winding down.
Store closures are becoming the norm
The retail sector in the U.S. is in crisis. Many big names are closing down stores. Macy’s, Party City, and Big Lots are just a few of the companies shutting down locations. A new study predicts that retailers could close as many as 15,000 stores in 2025. That’s up from over 7,300 closures last year. Retailers are struggling to keep up with changing consumer habits. More shoppers are choosing to buy online, and many are looking for better deals.
Despite the uncertainty, Forever 21’s legacy is hard to ignore. The brand was once a go-to destination for fast fashion. Now, it is on the brink of collapse. Its stores may close, but the brand’s name might live on through licensing agreements. However, the future of Forever 21 remains unclear. Can the brand find a way to survive, or is this the end? Only time will tell.
