Forever 21 stores in the U.S. are poised to go out of business after the company that owns them filed for Chapter 11 bankruptcy protection.
Why it matters: The retailer — which has about 354 stores and more than 9,200 employees — was a pioneer in fast fashion, becoming a once-ubiquitous presence in American malls and a destination for teenage shoppers.
The big picture: It’s the latest retailer to close stores and comes as liquidation sales continue at Party City, Kohl’s, Macy’s, JCPenney and Joann stores.
- Approximately 15,000 store closures are expected this year, nearly double the 7,325 stores that closed in 2024, according to Coresight Research.
Forever 21 store closings
Driving the news: F21 OpCo LLC, which operates the U.S. stores through a brand licensing agreement, filed for bankruptcy protection in Delaware with plans for an “orderly wind down” of its operations.
- Liquidation sales will begin imminently.
- The company said it would continue to seek a buyer of its business or some of its assets in a deal that could keep its stores open at the last minute.
Forever 21 bankruptcy 2025
Context: It’s the second bankruptcy for Forever 21 — a move known in the restructuring world as Chapter 22.
- After its 2019 bankruptcy, the company’s assets were sold to a consortium of buyers.
- The retailer’s foreign assets are not included in this second bankruptcy.
Zoom out: Forever 21 said it’s been facing “significant losses” after grappling with the inflation crisis and the surge of Chinese retailers Temu and Shein.
- Those competitors have taken advantage of an import loophole allowing goods valued under $800 to avoid tariffs, which lets them sell items super cheap to American consumers.
- “The ability for non-U.S. retailers to sell their products at drastically lower prices to U.S. consumers has significantly impacted the Company’s ability to retain its traditional core customer base,” F21 OpCo co-chief restructuring officer Stephen Coulombe said in a court filing.
Flashback: Founded in 1984, Forever 21 expanded rapidly over the next couple of decades.
- The retailer had 43,000 employees and $4 billion in sales at its peak, known for its clothing, jewelry, handbags, scarves, shoes, and accessories.
Between the lines: Forever 21 is in the Catalyst Brands portfolio, a company that was created when Sparc Group — owner of other former mall mainstays including Aéropostale, Eddie Bauer, Brooks Brothers, Lucky Brand, and Nautica — acquired and merged with JCPenney in January.
- Catalyst said in January that it was “exploring strategic options for the operations of Forever 21.”
Editor’s note: This story was updated with information about Catalyst Brands’ plans for Forever 21.
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