By Brinda Patel
Staff Writer
After filing for bankruptcy six years ago, Forever 21 is ready to close its doors in shopping malls after filing for bankruptcy again earlier this month.
On March 17, the fast fashion retailer filed for bankruptcy for the second time. If the company is not bought out in the coming weeks, its remaining 354 United States locations will close their doors for good as of early May.
According to the Wall Street Journal, Forever 21 has been in decline for years due to competition from other fast fashion retailers like Shein and Temu.
Brad Sell, chief financial officer of Forever 21, released a statement in Business Wire about filing for chapter 11 bankruptcy again and economic challenges that led to this decision.
“Following the conclusion of our strategic review and after careful deliberation, we made the decision to file for chapter 11 to implement a court-supervised marketing process to solicit a going concern transaction, and, in the absence of such an arrangement, an orderly wind down of operations,” wrote Sell. “As we move through the process, we will work diligently to minimize the impact on our employees, customers, vendors and other stakeholders.”
Sell continued to express his gratitude to all of Forever 21’s employees and their commitment to their customer base.
The company website will continue to run and the U.S. stores will continue to hold liquidation sales as operations start winding down, according to 9News.
According to the Los Angeles Business Journal, the retailer plans to lay off 358 employees from its headquarters in Los Angeles beginning April 21. PIX11 has made a list of closures around the tri-state area, with 21 stores set to close in New York and 15 stores in New Jersey.
Nicole Craig, a professor at Arizona State University and former senior buyer for Forever 21, wrote a post on LinkedIn about the original founders’ hard work after the second bankruptcy was filed.
“The original owners were really good at what they did and so they were ramping up at warp speed,” Craig said. “They were very successful for a long time, but sometimes it can be hard to take a teen brand and make it bigger.”
Forever 21’s performance revenue peaked in 2015 at $4.4 billion, according to the Seattle Times. They moved aggressively into department stores after Mervyn’s, a now-defunct clothing chain, went out of business in the early 2000s. According to Dallas News, Forever 21 is $1.58 billion in debt, after losing more than $400 million over the past three years. $150 million was lost in 2024 alone.
After the first bankruptcy filing in 2019, the company was acquired by Simon Property, Brookfield Property Partners and Authentic Brands Group, according to 6abc Philadelphia.
“Forever 21 is a powerful retail brand with incredible consumer reach and a wealth of untapped potential,” said Jamie Salter, founder and CEO of ABG, after acquiring the fast fashion chain in February 2020. However, Salter later stated in 2024 that “Forever 21 was probably the biggest mistake I’ve made.”
