Forever 21 filed for bankruptcy again on March 16 within six years. F21OpCo, the operator of the clothing segment, cited competition from foreign fast-fashion companies, inflation, and global economic challenges as the reasons behind Forever 21 bankruptcy. On March 16, F21OpCo filed for voluntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Delaware. It plans to wind down its U.S. operations while looking for a buyer for its remaining assets.
The Forever 21 stores in the US and online websites will remain open as operations will shut down. To clear the wages of employees, the company has filed a motion with the court that will allow them to use cash stock for payment and other benefits.
Forever 21 Bankruptcy: Is This the End of an Iconic Brand?
In 2019, Forever 21 filed for bankruptcy for the first time. Although, the company managed to survive the last five years but wasn’t able to thrive towards success leading to another bankruptcy filing. Analysts believe that this filing will mark the final shutting down of Forever 21. Brad Sell, CFO of F21OpCo said, “We explored every option to secure the Company’s future, but couldn’t find a viable solution due to competition from overseas fast fashion brands, rising costs, economic pressures on our core customers, and shifting consumer trends.”
Local reports say that Forever 21 is closing stores in states like Connecticut, California, Washington, Pennsylvania, Idaho, and North Dakota. Last month, the company also announced plans to lay off 358 workers and close its Los Angeles headquarters.
Forever 21 Pins Its Bankruptcy on Shein and Temu
A major factor in Forever 21’s bankruptcy is the fierce competition from Shein and Temu, which was something Jamie Salter, CEO of Authentic Brands, predicted last year. He mentioned at a conference that Forever 21’s 2023 partnership with Shein had only modest results, according to Retail Dive.
Sell, CFO of F21 OpCo, explained that foreign fast fashion brands benefit from the de minimis exemption, which lets items under $800 enter the U.S. without duties or much paperwork. This loophole helps Chinese retailers like Shein and Temu keep prices incredibly low. While Shein and Temu became a nightmare for the retail segment, the meme segment of social media platforms found another template.
As one of the X users posted, “How SHEIN and Temu did Forever 21:”
How SHEIN and Temu did Forever 21: pic.twitter.com/XXOG1r5zS9
— journalist jawn (@dirtywhiteups) March 17, 2025
What’s Next for Iconic Forever 21?
F21OpCo is looking for buyers and contacted about 200 bidders but none of them has converted to a deal. The company is having a hard time finding a buyer that provides the expected valuation for the retail segment. Until then, Forever 21 stores will remain open and business will commence as usual. Additionally, Forever 21 is advertising huge discounts of about 80% and 70% on specific products.
Customer Reactions to Forever 21’s Bankruptcy Filing
Forever 21 is a beloved retail chain for many in their 20s and millennials, with plenty of nostalgic memories from their teenage years. The bankruptcy news was followed by mixed reactions of customers on social media platforms. One of the X users wrote, “What I loved about Forever 21 is that I never knew what I was going to get in terms of quality. I owned tops that disintegrated after two washes, and yet I have leggings from there that have stood the test of time for ten years. Complete and utter chaos. I’ll miss it.”
What I loved about Forever 21 is that I never knew what I was going to get in terms of quality. I owned tops that disintegrated after two washes, and yet I have leggings from there that have stood the test of time for ten years. Complete and utter chaos.
I’ll miss it. https://t.co/6rCSLOtvSv
— Ashley Elizabeth (@AshleyDeLarge) March 17, 2025
While some users gave a light humorous goodbye to Forever 21 as they wrote, “So you telling me forever 21 ain’t forever after all?”
So you telling me forever 21 ain’t forever after all ? pic.twitter.com/B9davXSzoY
— ish🦇 (@yoour_ex) March 17, 2025
