• Fast-fashion retailer Forever 21 has filed for Chapter 11 bankruptcy protection in the U.S. for the second time in six years.
• The company will conduct liquidation sales at its U.S. stores while maintaining its website operations.
• Forever 21 struggles against rising competition from online retailers such as Shein and Temu, which have significantly impacted its sales.

Fast-fashion leader Forever 21 has entered Chapter 11 bankruptcy for a second time, prompted by the continuous decline in mall traffic and fierce competition from online retailers. The company, which filed for bankruptcy protection on March 17, will now begin to wind down its U.S. operations unless it can find a suitable buyer for its assets. As the brand faces liquidation, it will continue to operate its stores and website in the U.S. during this process, although its international locations remain unaffected Los Angeles Times.

Forever 21's chief financial officer Brad Sell stated, “We have been unable to find a sustainable path forward, given competition from foreign fast fashion companies...as well as rising costs, economic challenges impacting our core customers.” These challenges have plagued the retailer since its previous bankruptcy in 2019, when it was ultimately bought out by a partnership of Authentic Brands Group and mall operators Simon Property Group and Brookfield Asset Management.

Founded in 1984 in Los Angeles, Forever 21 was once a giant among fast-fashion brands, making trendy styles accessible to young consumers. However, increased competition from low-cost online retailers such as Shein and Temu has significantly undermined its market position. These competitors have adeptly utilized loopholes to minimize shipping costs and offer lower prices, making it increasingly difficult for Forever 21 to maintain profitability NPR.

At present, Forever 21 holds estimated assets between $100 million and $500 million but faces liabilities ranging from $1 billion to $10 billion. Throughout this transitional phase, Authentic Brands Group will keep control of Forever 21's trademarks and may explore options for licensing the brand to other operators Reuters.

As retail continues to evolve, Forever 21's situation highlights the broader struggles faced by traditional brick-and-mortar stores attempting to compete with the growing e-commerce market. Its legacy as a fast-fashion pioneer now faces an uncertain future amidst a rapidly changing retail landscape.