The once-popular shop for fashion-conscious teenagers, Forever 21, is preparing to shut down all of its stores across the United States.
The brand is filing for bankruptcy a second time as it battles online rivals, NBC News reported on Monday.
“The operator of Forever 21’s U.S. unit said Sunday that foreign competition from fast-fashion rivals, rising costs, economic challenges and evolving consumer trends were to blame. For the time being, stores and the company’s U.S. website will remain open as the company starts winding down operations and seeks a last-minute bidder for its assets,” the outlet said.
Per Fox Business, F21 OpCo decided to file for bankruptcy after the retailer could not find a buyer for its U.S. stores. The outlet noted the shops, which are mostly located in shopping malls, have struggled due to more people buying online.
“Shopping malls, once bustling hubs of activity, face an uncertain future. Big brands like Target, Macy’s and JCPenney — often mall anchor stores — and smaller mall retailers face increasing challenges due to the relentless growth of e-commerce,” according to a 2024 article from Business.com.
Clothing is displayed on mannequins at a Forever 21 store that is preparing to close in San Francisco, California. (Justin Sullivan/Getty Images)
“As online shopping continues to soar, mall foot traffic has dwindled, and physical stores struggle to compete with the convenience and speed of digital retail,” the report said.
Forever 21 was founded by Korean immigrants in California in the early 1980s and grew in popularity among young people looking for more affordable, trendy clothing. Years later, its sales peaked at over $4 billion “and founders Jin Sook and Do Won ‘Don’ Chang were estimated to hold a combined net worth of $5.9 billion,” the NBC article stated.
However, it was forced to compete with websites including Asia-based Shein and Temu, which pump out even cheaper merchandise from thousands of factories in China, the Wall Street Journal (WSJ) reported on Monday.
The news comes after many stores across America were closing down as consumers were unable to spend money on non-essentials due to the economy under the leadership of now former President Joe Biden (D), Breitbart News reported in October.
In January, the Kohl’s department store chain said it was closing 27 “underperforming” stores and a distribution center, according to Breitbart News.
Per the Fox article, “Forever 21’s trademark and other intellectual property are owned by Authentic Brands. Authentic will continue to control the brand, which could live on in some form. Authentic Brands CEO Jamie Salter said last year that acquiring Forever 21 was ‘the biggest mistake I made.'”
