Forever 21 Files for Bankruptcy Protection Again Amid Shifting Retail Trends
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Forever 21 has once again filed for Chapter 11 bankruptcy protection as declining mall traffic and fierce competition from online retailers like Amazon, Temu, and Shein continue to challenge the brand’s traditional retail model. The company, managed by F21 OpCo, announced plans to wind down its U.S. operations while it explores options to either partner up or sell off some of its assets.
Chief Financial Officer Brad Sell explained that despite considering all potential strategies to secure the company’s future, persistent pressure from foreign fast-fashion rivals—benefiting from tax exemptions on small shipments—has made it impossible to sustain profitability in the current market. The de minimis exemption, which allows goods valued under $800 to enter the U.S. duty-free, has significantly undercut Forever 21’s pricing and margins.
While U.S. stores will transition to liquidation sales and gradually cease operations, international locations—managed by separate licensees and under the ownership of Authentic Brands Group—will continue to operate normally. Founded in 1984, Forever 21 once thrived during the mid-1990s and the Great Recession but expanded aggressively at a time when shoppers were increasingly moving online, a trend that has ultimately diminished its market share, according to industry experts.
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