Once a staple in American fast fashion, Forever 21 has officially shuttered all 354 of its US stores, with closures completed by May 1. The move follows the retailer's Chapter 11 bankruptcy filing in March with the US Bankruptcy Court for the District of Delaware.
The retailer started closing many of its locations from April 1 onwards. As per court documents obtained by USA Today, it plans to shut down the remaining stores by the beginning of May. However, the brand’s international locations will continue to operate, as per its website.
The company’s financial struggles reflect broader shifts in the retail landscape. According to The Street, approximately 57 per cent of global online shoppers purchase at least some of their clothing online, and more than 20 per cent of all fashion sales now occur via e-commerce. As a result, traditional brick-and-mortar retailers are seeing fewer in-store shoppers, making it harder to stay afloat.
Brad Sell, CFO, Forever 21, cities multiple reasons including growing competition from foreign fast fashion brands, rising operational costs, and changing consumer preferences for the bankruptcy. Forever 21 has also been hit hard by economic pressures and an increasingly competitive market.
One major challenge faced by the company is the de minimis import exemption, which allows goods valued under $800 to enter the U.S. duty-free. This gives overseas e-commerce giants like Shein and Temu a pricing advantage, allowing them to offer cheaper products without paying import taxes—something US retailers can’t easily match.
Parent company, F21 OpCo had hoped a buyer would step in to rescue the brand and halt store closures, but as of April 30, no serious offers had materialized.
Despite the shutdown of its physical locations, some industry leaders remain optimistic about the brand's future. Jarrod Weber, Global President, Lifestyle, Authentic Brands, one of the most recognizable names in fast fashion, Forever 21 is adapting to strike the right balance across physical stores, e-commerce, and wholesale.
While the brand’s expansion in US has ended, it is expected to focus on its global footprint and digital presence moving forward.
