Forever 21 plans to close all stores after filing for bankruptcy protection

Clothing retailer Forever 21 is set to close all of its U.S. stores after filing for bankruptcy protection. Photo: Kevin Carter/Getty Images

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.

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