Forever 21 Files Bankruptcy Again: Is This the Final Exit?
Published: March 17th, 2025.
Forever 21—the mall staple you probably grew up shopping in—is officially bankrupt. Again.
The fast-fashion giant’s U.S. operating company filed for Chapter 11 bankruptcy protection this week, marking the second time in six years the brand has found itself in serious trouble. But this time, it doesn’t look like there’s a clear way out.
The company announced that its U.S. stores and website will remain open for now, but liquidation sales are already planned. Behind the scenes, Forever 21 is scrambling to sell off assets to salvage part of the business. Without a buyer, though, a full shutdown of its U.S. operations could be on the table.
This isn’t Forever 21’s first brush with collapse. After filing for bankruptcy in 2019, it was bailed out by major mall landlords—Simon Property Group and Brookfield—alongside Authentic Brands Group (ABG). That lifeline was meant to stabilize the brand and keep mall traffic flowing.
But just last year, signs of trouble resurfaced. In June 2024, Forever 21 reportedly sought rent concessions from landlords, asking for reductions of up to 50% to stay afloat. Fast forward to today, and that strategy clearly wasn’t enough.
A lot has changed since Forever 21’s peak, when it operated around 800 stores globally, with over 500 in the U.S. alone. The brand once defined cheap, trendy fashion for young Americans, but its model hasn’t aged well.
Several factors contributed to this second downfall:
- The rise of online fast-fashion giants like Shein and Temu, who offer similar prices with faster turnaround times and a constant influx of new styles
- Dwindling foot traffic in malls was a problem long before the pandemic but is now nearly irreversible
- Rising costs and inflation, squeezing both consumers and Forever 21's operations.
- A lack of meaningful reinvention, preventing them from competing on speed, price, or digital convenience
Even ABG’s CEO, Jamie Salter, admitted last year that acquiring Forever 21 might have been their “biggest mistake.”
Here’s where things get murky. Authentic Brands Group still controls the brand’s intellectual property (its name, logos, and trademarks), and those assets could be repurposed. But the brick-and-mortar stores we all recognize—350 still standing—could soon vanish.
One rumored plan could keep around 100 stores open in high-traffic locations. However, industry insiders suggest that this may not be sustainable in the long term, especially given the expense of sourcing products for a smaller footprint.
At a time when American malls are already under pressure, Forever 21’s potential exit feels like another nail in the coffin. The news isn’t just another store closing—it’s symbolic of a shift in how younger generations shop.
They aren’t wandering malls anymore. They're scrolling apps, ordering fast, and expecting new trends weekly. Forever 21, once the embodiment of disposable fashion, couldn’t keep up with a digital-first, ultra-competitive market.
Is this the final blow for the brand that once dominated American fast fashion? Possibly. But one thing’s certain—this is a wake-up call for U.S. retail. The mall era we grew up with is fading, and Forever 21’s bankruptcy might be the clearest sign yet.
You’ll want to keep watching—because this moment could be the start of a much bigger shift.