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Forever 21 Bankruptcy Protection in the US: What’s Next for the Fashion Brand?

Somto NwanoluebySomto Nwanolue
March 17, 2025
in News
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Forever 21 Bankruptcy Protection in the US: What’s Next for the Fashion Brand?
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Forever 21 has filed for bankruptcy protection in the US, signaling a potential shutdown for the once global favorite brand for trendy and affordable fashion.

The brand’s operating company filed for bankruptcy protection, announcing that it will begin the process of winding down its stores and online platform.

Despite the filing, Forever 21 confirmed that its US stores and website will remain open during the liquidation process. However, the future of the brand remains uncertain as it navigates this new terrain and of course, fierce competition.

Forever 21 Bankruptcy Protection in the US: What’s Next for the Fashion Brand?

Table of Contents

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  • A Look Back at Forever 21’s Rise and Fall
  • Forever 21’s Liquidation Sales and Potential Asset Sales

A Look Back at Forever 21’s Rise and Fall

Founded in Los Angeles in 1984 by South Korean immigrants, Forever 21 quickly became a global fast-fashion powerhouse. Known for its inexpensive, trendy clothing and accessories, the brand appealed to young shoppers and competed with giants like Zara and H&M.

At its peak in 2016, Forever 21 operated 800 stores worldwide, including 500 in the US. However, the rise of online shopping, changing consumer preferences, and increased competition from foreign fast-fashion brands like Shein, Pretty Little Thing and Boohoo have contributed to its decline.

Forever 21’s current struggles showcases the ever changing landscape of retail, where rising costs, economic pressures, and the dominance of online shopping have eroded its market share.

Brad Sell, the company’s chief financial officer had said;

“We have been unable to find a sustainable path forward, given competition from foreign fast-fashion companies and rising costs impacting our core customers.”

The brand, which filed for bankruptcy protection once before in 2019, was acquired by a group of investors. However, the turnaround efforts have failed to revive its fortunes, leading to this latest filing.

Forever 21’s Liquidation Sales and Potential Asset Sales

As part of the bankruptcy process, Forever 21 will conduct liquidation sales at its US stores. The company also announced that some or all of its assets could be sold through a court-supervised process.

“In the event of a successful sale, the Company may pivot away from a full wind-down of operations,” the firm said in a statement. Chapter 11 bankruptcy protection allows the company to reorganize its debts or sell parts of its business while postponing obligations to creditors.

Meanwhile, the Forever 21 stores and e-commerce platforms outside the US are operated by independent license holders, therefore, will not be impacted by the bankruptcy filing. This means the brand will continue to operate in international markets, even as its US presence shrink.

Tags: BankruptcyFashionFashion brandfederal characterForever 21NewsUS
Somto Nwanolue

Somto Nwanolue

Somto Nwanolue is a news writer with a keen eye for spotting trending news and crafting engaging stories. Her interests includes beauty, lifestyle and fashion. Her life’s passion is to bring information to the right audience in written medium

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