Athira Sethu
Kochi, 17 March 2025
Forever 21, a popular fashion store, has gone bankrupt in the U.S. for the second time in six years. The company has been facing challenges with reduced mall traffic and stiff competition from online shopping websites.
The bankruptcy filing means Forever 21 will begin liquidating its stores and selling off its remaining merchandise. The company could not find a buyer for its 350 U.S. stores, but its brand name and intellectual property, owned by Authentic Brands Group, may continue in some form.
Forever 21 had initially filed for bankruptcy in 2019 but was subsequently acquired by a consortium which comprised Authentic Brands and large mall owners Simon Property and Brookfield. Though they attempted to relaunch the brand, it couldn’t recover financially.
As part of the bankruptcy process, Forever 21 is also considering selling some or all of its assets. If a buyer can be secured, the company may be able to continue in some form instead of closing entirely.
For the time being, Forever 21’s US stores and site will stay operational, and its global outlets will not be touched. The company, now owned by Catalyst Brands,a corporation established as a result of a merger of Forever 21’s previous owner Sparc Group and department store chain JC Penney, is still weighing its own future.
Forever 21 was at its strongest when it was a youth favorite for its budget-friendly style. It had approximately 800 locations globally, 500 in the United States. But when e-commerce caught on and old-fashioned malls suffered, it made it hard for the company to last.
With liabilities ranging from $1 billion to $10 billion, Forever 21’s financial woes are enormous. The retailer is optimistic that a successful sale will allow it to sidestep an outright closure. Authentic Brands, which owns the Forever 21 brand name, can also find alternative means to sustain the brand.
