: The End of an Era for U.S. Fast Fashion
Forever 21, once a dominant force in the fast-fashion industry, has filed for Chapter 11 bankruptcy for the second time in six years. The announcement on Sunday marks a significant turning point for the retailer, which plans to shut down its U.S. operations amid mounting challenges from online competitors, changing consumer habits, and declining mall traffic.
Founded in Los Angeles in 1984 by South Korean immigrants Do Won Chang and Jin Sook Chang, Forever 21 quickly became a favorite among young shoppers seeking trendy yet affordable clothing. By the mid-2000s, the brand had reached impressive milestones, achieving $1 billion in annual sales by 2005 and peaking at $4 billion a decade later. At its height, Forever 21 operated nearly 800 stores globally, including 500 in the United States.
The retailer’s success was built on offering fast-fashion styles that mimicked high-end designs at accessible prices. Forever 21 became a staple in American malls, standing alongside competitors like H&M and Abercrombie & Fitch. However, the company’s rapid expansion coincided with technological shifts that disrupted traditional retail models.
Forever 21’s decline can be attributed to several factors:
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: Online shopping platforms like Amazon, Shein, and Temu have transformed consumer behavior, offering convenience and competitive pricing that traditional brick-and-mortar stores struggle to match.
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: The slow death of American malls has significantly impacted Forever 21, as most of its stores are located within these shopping centers.
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: Rising operational costs and economic challenges affecting its core customer base have further strained the company’s finances.
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: Younger shoppers are increasingly prioritizing sustainability and unique styles over mass-produced fast fashion.
Brad Sell, Forever 21’s Chief Financial Officer, acknowledged these difficulties in a statement: “We have struggled to establish a viable path forward due to competition from international fast-fashion brands, alongside rising expenses, economic difficulties impacting our primary customer base, and evolving consumer trends.”
In its bankruptcy filing with the District of Delaware court, Forever 21 listed assets valued between $100 million and $500 million and liabilities ranging from $1 billion to $10 billion. The company also reported having between 10,001 and 25,000 creditors.
As part of its Chapter 11 proceedings:
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Liquidation sales will begin at all U.S. stores.
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A court-supervised sale process will be conducted to explore potential buyers for some or all of its assets.
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The company’s U.S. website will remain operational during this process.
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International stores operated by licensees will remain unaffected.
Forever 21 stated that if a successful sale occurs during the bankruptcy process, it may pivot away from shutting down entirely to facilitate an ongoing business transaction.
Forever 21 has undergone several ownership changes since its first bankruptcy filing in September 2019. After closing over 150 stores during that period, the retailer was acquired by Sparc Group—a joint venture between Authentic Brands Group (ABG) and mall operators Simon Property Group and Brookfield Asset Management.
In January 2025, Sparc merged with JC Penney to form Catalyst Brands. This entity currently owns Forever 21 but has struggled to find a sustainable path forward for the retailer. Catalyst had previously announced it was exploring strategic options for the brand but ultimately could not prevent this second bankruptcy filing.
Authentic Brands Group continues to own Forever 21’s trademark and intellectual property. ABG CEO Jamie Salter recently admitted that acquiring Forever 21 was “the biggest mistake I made,” signaling doubts about the brand’s future viability.
Forever 21 has faced intense competition from international fast-fashion giants like Shein and Temu. These companies have leveraged exemptions such as the U.S. de minimis tax rule—which waives customs procedures and tariffs on imported items under $800—to undercut prices and margins for domestic retailers like Forever 21.
This competitive pressure has accelerated closures across the retail sector as consumers increasingly turn to online platforms for affordable clothing options.
Forever 21 plans to hold liquidation sales at its remaining U.S. stores while continuing operations on its website during the bankruptcy process. However, with no buyer currently lined up for its assets or operations, this move likely signals the end of Forever 21’s presence in American malls.
Last month, reports suggested that up to 200 of Forever 21’s remaining 350 locations could close as part of the bankruptcy proceedings. While liquidation sales may offer temporary relief for customers seeking deals on clothing, they mark the final chapter for many storefronts across the country.
The closure of Forever 21 stores will leave thousands of employees without jobs and further weaken already struggling malls across America. Once a cornerstone of youth fashion culture, Forever 21’s downfall reflects broader challenges faced by traditional retailers in adapting to modern consumer demands.
While Forever 21’s physical presence in the U.S. may soon disappear, its brand could live on through licensing agreements or partnerships with other companies. For example, ABG previously explored collaborations with Shein that could allow Forever 21 products to be sold on Shein’s platform or through store-within-store formats.
Regardless of what happens next, Forever 21’s story serves as a cautionary tale about the importance of innovation and adaptability in retail. As consumers continue to embrace e-commerce and sustainable fashion choices, traditional fast-fashion brands must evolve or risk extinction.
For now, shoppers can take advantage of liquidation sales while reflecting on how this iconic retailer shaped their wardrobes—and how it struggled to keep pace with changing times.
