Forever 21 Files for Bankruptcy Again in U.S.
Forever 21 has filed for Chapter 11 bankruptcy for the second time in six years due to rising costs, economic challenges, and competition from online retailers and foreign fast-fashion brands. The filing, made in Delaware, lists assets between $100 million and $500 million and liabilities ranging from $1 billion to $10 billion. The company will begin liquidation sales while attempting to sell some or all of its assets through a court-supervised process.
Despite the filing, Forever 21’s U.S. stores and website will remain open for now, and its international locations, operated by other license-holders, will not be affected. The brand was once a major player in fast fashion, drawing in young shoppers with affordable, trendy clothing, but has struggled with declining mall traffic and shifting consumer habits. Forever 21’s first bankruptcy in 2019 led to hundreds of store closures before it was bought out by a joint venture involving Simon Property Group, Brookfield, and Authentic Brands.
Now part of Catalyst Brands, a company formed earlier this year through the merger of Forever 21’s previous owner, Sparc Group, and JCPenney, the brand's future remains uncertain. While Authentic Brands still owns its trademark and intellectual property, CEO Jamie Salter previously admitted acquiring Forever 21 was “the biggest mistake I made.” The company is still open to the possibility of avoiding a full shutdown if a successful sale is made.
