Fast fashion retailer Forever 21 has filed for bankruptcy in the U.S. for the second time, announcing the closure of its 350 American stores while struggling to compete in an evolving retail landscape. However, Forever 21 locations in Canada and other international markets will not be affected and will continue operating as usual.
Forever 21’s international locations, including brick-and-mortar stores and e-commerce platforms in Canada, are operated by independent licensees and are not included in the Chapter 11 bankruptcy filings. This means that Canadian customers can continue shopping in-store and online without disruption.
F21 OpCo, the U.S. licensee of Forever 21, cited several major challenges that led to the bankruptcy filing:
- Increased Competition: Rising dominance of Chinese fast-fashion giants Temu and Shein undercut Forever 21’s pricing and market share.
- Economic Pressures: Inflation, rising inventory costs, supply chain disruptions, and higher wages strained the company’s financial health.
- Changing Consumer Trends: A shift toward online shopping and a decline in mall traffic further impacted sales.
Despite the bankruptcy, Forever 21’s intellectual property remains under Authentic Brands Group, which may continue licensing the brand to operators globally.
Brad Sell, CFO of F21 acknowledged the difficult decision, stating:
“While we have evaluated all options to best position the company for the future, we have been unable to find a sustainable path forward. As we move through this process, we will work diligently to minimize the impact on our employees, customers, vendors, and stakeholders.”
The first bankruptcy hearing is scheduled for March 18, 2025, in the U.S. District Court of Delaware. Meanwhile, Forever 21’s Canadian operations remain stable, with no plans for closures or disruptions.