At its peak, Forever 21 had 800 stores, 43,000 employees and over $4 billion in annual sales|Phillip Pessar|CC BY 2.0

Forever 21 and its parent company filed for bankruptcy on Sunday for the second time in six years, planning to shut down US operations and lay off employees unless a buyer emerges.

The retailer cited rising costs, weak mall traffic, and competition from Chinese fast-fashion giants like Shein and Temu, which ship cheaper goods directly to US shoppers, bypassing import duties.

Struggles since first bankruptcy
Once a major fast-fashion chain, Forever 21 has struggled since its 2019 bankruptcy. Later, mall operators and Authentic Brands Group acquired it, but financial losses continued.

Financial decline and industry challenges
The company entered bankruptcy with $1.58 billion in debt after losing over $400 million in the past three years. In 2024 alone, it lost $150 million and projected a $180 million loss for 2025.

Rising costs, changing consumer trends and inflation worsened Forever 21’s troubles. The brand, once known for bringing runway styles to malls, never recovered.

At its peak, Forever 21 had 800 stores, 43,000 employees, and over $4 billion in annual sales.

The future
Forever 21 is holding closing sales at its 354 US stores and honoring gift cards for 30 days. Its international stores remain open.

The brand’s owner, Catalyst Brands, is exploring selling parts of the business, but its future remains uncertain.