Updated on March 11th, 2025
If you’ve got a Forever 21 in your local mall, you might want to shop there soon — it could be on the chopping block. The fast-fashion giant hasn’t yet filed for bankruptcy, but sources say it’s imminent. According to Bloomberg, Forever 21 is frantically trying to find a buyer and planning to close 200 stores. USA Today has also reported Forever 21 will lay off roughly 358 employees and close its Los Angeles headquarters.
A look at Forever 21
Forever 21 established its fame by selling affordable, trendy clothing in the 1980s. The chain quickly became a fast-fashion favorite among younger consumers. Through mall expansion and its online presence, the company grew into an international brand. Here’s a look at our coverage of Forever 21 over the years:
At its peak, Forever 21 operated more than 500 stores worldwide. But changing consumer preferences — the broad shift to online shopping — and stiff competition — from Temu and Shein — created issues for the chain. Financial struggles led to a 20 led to a 2019 bankruptcy and a rash of store closures. Today, there are about 350 Forever 21 stores still open.
What’s next for Forever 21
The company is working with a restructuring advisor to define a sustainable path forward. Lowering costs and closing unprofitable stores are key objectives, along with finding a buyer. The official line as of February 2025 was this quote obtained by USA Today:
Forever 21’s operating company, which is the brand licensee in the U.S., continues to explore strategic options, including a potential sale, while also reducing costs and optimizing its store footprint. The efforts are ongoing and no final decisions have been made regarding the outcome of the process or the number of stores that may be closed.
In late-February and early-March, reports of store closures in Pennsylvania, Connecticut, and California have surfaced. According to Fox Business, Sarah Foss, head of legal at analytics company Debtwire, predicts Forever 21 will move forward with a bankruptcy filing, shutter all stores for good, and liquidate remaining assets.
Money and investing advice from Catherine Brock:
That doesn’t necessarily mean the end for the Forever 21 brand, however. Remember what happened to Bed Bath & Beyond. After struggling for years, the brand was purchased out of bankruptcy by Overstock. Overstock rebranded itself as Bed Bath & Beyond, and the brand remains alive online today. And then there’s the Lord & Taylor saga. Lord & Taylor, once a top-end department store, has been sold multiple times to buyers with grand intentions of reviving the brand. Those efforts have failed so far, but there’s another one in the works.
However, Foss notes that the Forever 21 brand and intellectual property may not be part of a bankruptcy liquidation. Could this mean a possible reboot by the current owner group? Time will tell.
What went wrong
Forever 21 appears to be another retail victim of tough times. A global pandemic followed by an extended inflationary period have expedited the demise of mall traffic and the shift to online shopping. Meanwhile, overseas online retailers have mimicked Forever 21’s offering: huge selection, trendy clothes, and cheap prices. Those retailers can compete more effectively than Forever 21 because they don’t have the burden of 100s of physical store locations.
The last time Forever 21 went bankrupt
In 2019, Forever 21 filed for Chapter 11 bankruptcy protection. Then, analysts said Forever 21 had expanded too quickly just as consumers turned away from mall shopping. Meanwhile, H&M and Zara did a better job getting new inventory into their stores and stole market share.
After the first bankruptcy, Forever 21 closed more than 100 stores in 2020. The brand was then rescued by a group of investors. Authentic Brands Group, Simon Property Group, and Brookfield Properties collectively paid $81 million for Forever 21’s assets.
The hope was that new leadership would help turn things around, but here we are once more.
A retail shift
Unfortunately, Forever 21’s troubles are not unique. JCPenney filed for bankruptcy in 2020, also announcing plans to close 200 stores. Later that year, the chain was bought by Simon Property Group and Brookfield Asset Management. Those names should sound familiar — they’re also involved in Forever 21. Simon Property Group owns and operates malls. Brookfield is an asset manager and property manager.
In 2025, JCPenney announced a “handful” of upcoming store closures.
Also in 2025, Kohl’s said it would close 27 stores. This is a small number compared to the chain’s total store count of 1,150. Ten of the planned closings are in California. Alabama, Arkansas, Colorado, Georgia, Idaho, Illinois, Massachusetts, New Jersey, Ohio, Oregon, Pennsylvania, Texas, Utah, and Virginia will also say goodbye to at least one Kohl’s store.
Analysts largely agree on what’s happening with these big retailers: Physical stores are expensive, competition is tough, and more consumer are staying home to shop. I’d love for readers to weigh in on this. Have your shopping habits changed in the last 10 years? How often are you shopping in stores? When you shop online, are you favoring different stores than you would shop in person? Let us know in the comments.
