After filing for bankruptcy for the second time, Forever 21 is beginning the process of closing all its stores. “We have been unable to find a sustainable path forward, given competition from foreign fast-fashion companies… as well as rising costs and economic challenges impacting our core customers,” Forever 21 CFO Brad Sell said in a statement. The company plans to liquidate all its products including online. There is the possibility that the brand could still be sold and remain operational, but that has yet to happen. “In the event of a successful sale, the Company may pivot away from a full wind-down of operations,” Sell said.
The move toward closing is not exactly surprising. The brand, once the pinnacle of mall fashion, has fallen from grace over the last decade and a half on several fronts. As fast-fashion competitors like Zara, Shein, PrettyLittleThing, and others, changed the model toward even faster fashion able to keep up with ever-evolving microtrends, Forever 21 could not compete.
But how did we get here? What does the closure of one of the original fast-fashion retailers say about the future of fast fashion? And how are people reacting? Let’s get into it.
SAN FRANCISCO, CALIFORNIA – FEBRUARY 20: A sign advertising a storewide sale is displayed in a window at a Forever 21 store that is preparing to close on February 20, 2025 in San Francisco, California. Clothing retailer Forever 21 is set to close 200 stores as the company searches for a buyer and considers a second bankruptcy filing. Forever 21 could have to liquidate its entire chain of nearly 350 stores if no buyer emerges. (Photo by Justin Sullivan/Getty Images)Justin Sullivan/Getty Images
Why is Forever 21 closing?
The Los Angeles-based brand has struggled financially for years and the reason is not straightforward. Since its inception in 1984, Forever 21 has been run by the Chang family who founded it. Do Wan Chang was the cofounder and CEO, and his wife, Jin Sook, and daughters, Linda and Esther, ran the executive suite instead of business leaders with experience running a major fashion corporation. What’s more, the company opened hundreds of massive stores around the United States and abroad with leases that far exceeded the trend toward e-commerce (some leases ran as far out as 20 years). According to the New York Times, which reported on the brand’s financial struggles after the first bankruptcy filing in 2019, the company spent $450 million on real estate.
In 2020, the brand was purchased by Authentic Brands, but its issues in brick-and-mortar were exacerbated by the global pandemic that not only rendered in-person shopping difficult for more than a year but also gave way to brands like Shein. What’s more, some consumers began to speculate that Forever 21’s quality worsened and the brand stopped producing plus sizes, one of the bigger markets for its competitors. In the statement from Sell, he specifically pointed to the de minimus loophole used by international brands that allows shipments under $800 to enter the United States duty-free.
What does closing Forever 21 say about fast fashion?
The closing of Forever 21 stores is perhaps a symptom of an already-changed fast-fashion economy. Over the last decade, the most successful competitors cut out the brick-and-mortar element and brought trends straight to their websites. Shein is probably the best example of that shift. The brand’s model prioritizes new trends on a weekly basis direct to customers with fewer SKUs (stock-keeping units) per item.
