Shoppers at a well-known mall may soon say goodbye to their local Forever 21 store as the fashion retailer faces another round of financial turmoil.
The brand, known for its trendy and affordable clothing, is reportedly considering shutting down around 200 stores as it prepares for a potential second bankruptcy filing. Sources told Bloomberg that the process could begin as early as March.
HISTORY OF TROUBLE
Forever 21 previously filed for Chapter 11 bankruptcy in 2019, leading to a major restructuring that significantly reduced its retail footprint. At its peak, the brand had about 500 stores across the U.S. and 800 worldwide.
Although it managed to remain in business after that initial filing, financial struggles have continued, and now it appears another round of closures is on the horizon.
One of the locations at risk is a Forever 21 store inside Acadiana Mall in Lafayette, Louisiana. While the closure isn’t yet confirmed, the company is negotiating with landlords to keep certain stores open, including this one. If an agreement isn’t reached, the Lafayette store could join Macy’s, which is already set to exit the mall as part of a separate wave of closures.
POTENTIAL SALE & FUTURE PLANS
In addition to closing unprofitable locations, Forever 21 is actively seeking a buyer for its remaining stores. If no deal is made, all locations could be forced to shut down.
Catalyst Brands, the company that operates Forever 21 in the U.S., acknowledged the ongoing uncertainty but stated that no final decisions have been made.
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“Forever 21’s operating company continues to explore strategic options, including a potential sale, while also reducing costs and optimizing its store footprint,” Catalyst Brands told Bloomberg.
The company is backed by major players, including Authentic Brands, Brookfield Corporation, Shein, and Simon Property Group. Authentic Brands owns Forever 21’s intellectual property and can continue licensing its name even if the current U.S. operator ceases operations.
STRUGGLES IN THE RETAIL SECTOR
The 200 stores currently on the chopping block have reportedly been unprofitable in recent years, forcing Forever 21 to delay royalty and rent payments in an effort to stay afloat.
Experts suggest that the retailer’s aggressive expansion strategy before its 2019 bankruptcy played a major role in its ongoing difficulties. Expanding too rapidly led to costly leases and left the company with limited resources to improve its supply chain.
Other challenges, such as declining mall foot traffic, increased competition from brands like Zara and H&M, and criticism over labor and environmental concerns, have only made things worse.
Forever 21 isn’t alone in facing these struggles. Several other fashion retailers have gone through financial hardships recently, including:
- Express, which declared bankruptcy in April 2024 and closed around 100 stores.
- Rue21, which filed for bankruptcy in May 2024—the second time in its history—and shut down at least 540 locations.
As Forever 21 navigates its latest financial crisis, shoppers and employees alike will be watching closely to see what happens next .
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