Forever 21 has filed for bankruptcy in the United States for the second time in six years, citing intense competition from foreign fast fashion companies.
The big picture: The company’s U.S. operating entity filed for bankruptcy in Delaware, signaling the end of an era for a brand that once dominated the fast fashion market for teens.
- Despite the bankruptcy filing, Forever 21 has stated that its stores and website in the US will remain open to continue serving customers while executing an “orderly wind-down” of its U.S. business.
- The retailer plans to conduct liquidation sales at its stores and is actively seeking a buyer for some or all of its assets as it struggles to find a sustainable path forward amid challenges from overseas rivals, rising costs, and shifting consumer trends.
Driving the news: Forever 21’s inability to compete with Chinese e-commerce giants like Shein and Temu, coupled with challenges posed by the COVID-19 pandemic contributed to its financial struggles.
- Following its first Chapter 11 bankruptcy filing in 2019, Forever 21 closed 200 stores and was later acquired by a group of investors for $81 million, allowing it to continue operating with a smaller retail footprint.
