Forever 21, the once-iconic fast-fashion retailer, has announced the closure of all its U.S. stores by May 1, 2025, following its second Chapter 11 bankruptcy filing in six years.
The company cited intense competition from online retailers like Shein and Temu, which benefit from the “de minimis exemption” allowing them to import goods under $800 without tariffs, enabling them to offer lower prices.
Founded in 1984 by Jin Sook and Do Won Chang, Forever 21 rapidly expanded, reaching over 350 U.S. stores and more than 540 locations worldwide at its peak. However, shifting consumer preferences, increased competition, and rising operational costs have led to its decline.
The company’s international operations and online presence will continue under Authentic Brands Group, which may license the brand to other operators.
Industry analysts note that Forever 21’s large store formats and lack of brand identity contributed to its downfall.
Liquidation sales are currently underway at all U.S. locations, marking the end of an era for the brand that once dominated American malls.
Forever 21’s exit from the American retail landscape reflects broader challenges in the fast-fashion industry, particularly for brick-and-mortar chains struggling to keep pace with rapidly evolving online platforms and consumer behavior. The brand, which once symbolized trendy and affordable fashion for young shoppers, failed to adapt to a digital-first world and growing sustainability concerns among Gen Z customers.
Retail experts say the final blow came from the brand’s inability to differentiate itself in a saturated market. Its business model—characterized by large inventory, massive store footprints, and rapid turnaround of fashion trends—has become increasingly unsustainable amid rising rent and labor costs, as well as supply chain disruptions. The rise of nimble e-commerce players such as Shein, which can push new trends to market within days at much lower prices, significantly undercut Forever 21’s appeal.
Forever 21 had previously filed for bankruptcy in 2019, leading to the closure of hundreds of stores. The brand was subsequently acquired by Authentic Brands Group (ABG), in partnership with Simon Property Group and Brookfield Property Partners, with hopes of reviving it. While ABG plans to maintain Forever 21’s digital presence and explore new licensing opportunities abroad, the decision to shutter all physical stores in the U.S. confirms that brick-and-mortar revival efforts have failed.
Customers across the U.S. have begun flocking to Forever 21 outlets for final clearance sales, many of which are offering steep discounts on remaining inventory. As of now, no definitive timeline has been shared for any potential reopening of physical stores under new partnerships or branding strategies.
With its departure, Forever 21 joins the growing list of once-thriving retail giants like Bed Bath & Beyond and Sears that have struggled to survive in the post-pandemic, e-commerce-driven economy. Its downfall stands as a cautionary tale for legacy retailers that fail to innovate and adapt in an increasingly digital and sustainability-conscious world.
