Forever 21 will be closing its doors for good.
The popular fashion retailer will close all of its U.S. stores after the company filed for bankruptcy for the second time. According to reports, the brand’s operation said that they can’t keep up with the foreign competition from fashion rivals, the rising costs, and economic challenges.
For now, stores and the company’s U.S. website will stay open as the company’s operations will start to wind down. This new filing adds to the challenges that the retail industry has been facing lately. Forever 21 will be joining other retailers who have closed their doors for good such as Big Lots, Joann, and Party City.
Forever 21 was founded in 1984 by Korean immigrants in California. It would quickly become a staple in malls across the country. In 2015, sales peaked at more than $4 billion. However, the brand began to feel the wrath of its online competition.
Sarah Foss, global head of legal at the financial firm Debtwire, said in a statement, “It is unlikely that a white knight will emerge to purchase all or a portion of its retail locations.” She added that the final decision to close all U.S. locations was Forever 21’s “disadvantage against foreign brands that make use of the de minimis exemption, a U.S. rule allowing goods worth less than $800 to sail through customs with few import duties and inspections.”
Forever 21 first filed for bankruptcy in 2019 with the hopes of becoming more efficient. However, the pandemic only added to the company’s worries, although it was bought out of bankruptcy by Authentic Brands, an operator of major retailers and mall operators.
The CEO of Authentic said in 2024 that purchasing Forever 21 was “probably the biggest mistake I made.” Experts say that the younger generation has also moved on from the brand. “Forever 21 was the brand that the former generation used,” Roger Beaham, a marketing professor and director of the Retail Learning Labs at Wake Forest University, said.
He continued, “Today’s shoppers want their own brand, they want their own identity.” In this latest bankruptcy filing, the company listed assets of $100 million and $500 million and liabilities of $1 billion to $10 billion.