Forever 21 closes all its US stores due to Bankruptcy

In fast fashion’s changing landscape, yet another big name is shuttering its stores across the United States. Forever 21, the top retail chain just filed for bankruptcy, leading to the closure of their 350 stores across the country. This is the second time that the brand has filed the same in just a span of six years.

According to various news reports, the decision comes on the heels of challenges faced by the retail industry, as consumer behavior and preferences have changed in the years coming out of the pandemic. Brick and mortar stores have been experiencing dwindling foot traffic as customers have shifted most of their shopping online.

Competition with Chinese ecommerce sites like Shein and Temu, aside from other retailers like Zara and Uniqlo, has also been cited as one of the primary reasons for the filing.

These platforms have also maximized the de minimis provision, which allows them to ship USD800 worth of products into the US sans import duties, allowing them to offer the latest trends at rock bottom prices. As an attempt at getting a slice of Shein’s market, Forever 21 inked a partnership with the platform to sell a co-branded clothing line, alongside in-store marketing events, with ownership stakes on either side.

The once-upon-a-time retail giant was founded in 1984 by Korean immigrants Jin Sook and Do Won "Don" Chang in California. At the time, other retailers catering to the younger crowd, like H&M and Abercrombie & Fitch were also on the rise.

In 2015, Forever 21’s sales grossed over $4 billion, with an employee workforce of 43,000. However, by 2019, online shopping eclipsed their sales, leading to their first bankruptcy filing. They received a lifeline when Authentic Brands Group purchased the brand, and its international IP. Last year, their CEO, Jamie Salter, was quoted to have said that buying the business is “probably the biggest mistake I’ve made.”

Authentic Brands Group continues to entertain bids for potential buyers for their assets and locations. While Forever 21 will come to a close in the US, the brand will continue its international business, alongside ecommerce via its website.