Forever 21 files for bankruptcy for second time in 6 yrs, may shut more stores

The retailer has assured that its international stores remain unaffected by the bankruptcy filing

by e4m Staff
Published: Mar 17, 2025 4:08 PM | 1 min read

Fast-fashion retailer Forever 21 has filed for Chapter 11 bankruptcy protection for the second time in six years as it struggles with declining mall traffic and growing competition from online brands.

Despite the filing, the company has assured that its US stores and website will continue to operate. However, liquidation sales are expected as part of a court-supervised process to sell some or all of its assets.

The retailer's financial situation is dire, with assets estimated between USD 100 million and USD 500 million, while liabilities range from USD 1 billion to USD 5 billion. More than 10,000 creditors are involved in the case.

Reports by Reuters and Bloomberg suggest Forever 21 is considering shutting down at least 200 more stores as it works through the bankruptcy process, which is set to unfold in the coming months. If the company fails to find a buyer, it could be forced to close its entire chain of around 350 stores.

Years of financial losses, unpaid royalties, and missed rent payments have put the company under pressure. While liquidation sales are already in progress, Forever 21 has also indicated that a successful sale could help it avoid a full shutdown and keep some operations running.

The retailer’s international stores remain unaffected by the bankruptcy filing.