Is Forever 21 going out of business? Stores closing, locations in peril as retailer files for 2nd bankruptcy
Forever 21 is facing another bankruptcy. The company that operates the fast-fashion retail brand, called F21 OpCo, LLC, has filed for Chapter 11 bankruptcy protection in a Delaware court. And while it plans to close its U.S. stores and hold going-out-of-business sales, there is still a chance for a sale that could keep some operations running.
For now, Forever 21 stores and its website will stay open as the company sells off inventory and looks for buyers.
The move mirrors a similar one made recently by Joann, the beloved arts and fabric chain, which had initially hoped to keep its stores operating before ultimately deciding to liquidate and shut its doors for good. Like Joann, Forever 21 is now in its second bankruptcy; it also filed for Chapter 11 protection in 2019, just months before the pandemic.
What happens next for Forever 21?
The apparel retailer is seeking a buyer to keep parts of the business alive rather than shutting down completely, although there’s no guarantee that will happen.
As Forever 21 explained in a press release, “In the event of a successful sale, the Company may pivot away from a full wind down of operations to facilitate a going-concern transaction.” This means that if someone buys the business, Forever 21 might not shut down completely.
Fast Company has reached out to Forever 21 for comment.
The company has faced increasing competition from cheaper and faster brands, in particular China-based Temu and Shein. Forever 21 inked a deal with the latter of those brands in 2023 that would allow its clothes to be sold on the platform.
In addition to competition, the company also cited rising costs and changing shopping habits as reasons for its precarious financial situation. Once a go-to store for trendy, affordable fashion, Forever 21 has struggled to keep up with online retailers and brands that move faster in the digital world.
Forever 21’s international stores, which are run by different companies, are not affected by the bankruptcy. But in the United States, the future of Forever 21 depends on whether a buyer steps in. If not, this could truly mark the end of a fast-fashion era.